Hong Kong SFC proposes enhancements to position limits regime

22 September 2016

On 20 September, the Hong Kong Securities and Futures Commission (SFC) released a consultation proposing enhancements to the Hong Kong position limits regime to expand its scope and allow the SFC to increase statutory position limits in certain circumstances.

Under the proposals, the cap on the excess position limit that may be authorised by the SFC under the current “Client Facilitation Excess Position Limit” would increase from 50% to 300% of the statutory position limit.  Additionally, new excess position limits are proposed for index arbitrage activities, asset managers and market makers of exchange-traded funds. It is also proposed that the statutory position limit for stock options contracts will triple to 150,000. This will facilitate the implementation of the proposals in Hong Kong Exchanges and Clearing Limited's market consultation concluded in June 2016 (which FIA previously responded to).

Ashley Alder, the SFC's CEO stated "The proposed enhancements address market participants' business needs and encourage them to conduct more of their derivative activities on exchange markets. By improving market efficiency and enhancing liquidity, this will help to promote Hong Kong as a risk management centre". 

The current consultation closes on 21 November 2016. 

FIA intends to respond with member feedback.  Please contact Phuong Trinh for further information.

  • FIA
  • Position Limits