Regulation of Over-the-Counter Derivatives: A Comparative Study of Proposals in Singapore and Hong Kong
23 Pages Posted: 27 Jun 2012
Date Written: June 27, 2012
This article identifies some of the potential legal and policy issues involved in the future regulation of over-the-counter (OTC) derivatives. First, regulators must be cautious in the regulation and solvency of some mammoth clearing-houses. Second, Singapore and Hong Kong both face challenges in the areas of global regulatory cooperation and extra-territorial regulatory effects. Third, the exact scope of a clearing obligation determines whether there is any regulatory competition or room for regulatory arbitrage in the future. Fourth, there are legal definition problems with the term ‘derivative’ and its sub-categories that must be addressed. Fifth, there are potential privacy and civil liability issues in relation to trade reporting. We will continue to monitor these legal and market issues as they develop.
Keywords: derivative, financial regulation, Hong Kong, Singapore, OTC derivative, clearing, CCP, trade reporting
JEL Classification: K10, K22
Suggested Citation: Suggested Citation