Hong Kong prepares boost to equity derivatives booking


The Hong Kong Monetary Authority (HKMA) is set to push through new rules allowing banks to net their equity derivatives positions when calculating large exposure limits, in a move likely to boost the city-state’s allure as a derivatives-booking hub.

Under current regulation, in place since 1997, a bank’s exposure to a single counterparty – or counterparties contained in a single corporate group – cannot exceed 25% of the bank’s capital base at all times. While this is in line with global rules,

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