Regulation of Over-the-Counter Derivatives: A Comparative Study of Proposals in Singapore and Hong Kong

23 Pages Posted: 27 Jun 2012

See all articles by Christopher C. Chen

Christopher C. Chen

Singapore Management University School of Law

Date Written: June 27, 2012

Abstract

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

Chen, Christopher C., Regulation of Over-the-Counter Derivatives: A Comparative Study of Proposals in Singapore and Hong Kong (June 27, 2012). Available at SSRN: https://ssrn.com/abstract=2094074 or http://dx.doi.org/10.2139/ssrn.2094074

Christopher C. Chen (Contact Author)

Singapore Management University School of Law ( email )

55 Armenian Street
Singapore, 179943
Singapore

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