On December 22, 2025, the Securities and Futures Commission ("SFC") issued a circular exempting non-centrally cleared equity options from margin requirements from January 4, 2026, aligning with EU and UK developments.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
Updated SFC Guidance on Management of Regulatory Capital
As economic conditions challenge Hong Kong businesses, the SFC has issued guidance to licensed corporations on compliance with regulatory capital requirements.
SFC Regulation of Virtual Asset Trading Platforms: The Emerging Hong Kong Framework
SFC proposes new regulation of virtual assets through licensing of operators of cryptocurrency and other digital asset trading platforms
SPOTLIGHT ON
FAMILY OFFICES
On December 22, 2025, the Securities and Futures Commission ("SFC") issued a circular to licensed corporations, notifying them that non-centrally cleared single-stock options, equity basket options, and equity index options (collectively, non-centrally cleared equity options) will be exempt from margin requirements effective January 4, 2026, until further notice.
The SFC took this action to preclude regulatory arbitrage and in recognition of the minimal exposure of licensed corporations to these options. The exemption aligns with recent global developments, specifically those in the European Union ("EU") and the United Kingdom ("UK").
In the EU, a permanent exemption from the margin requirement for single-stock equity options and equity index options came into effect on December 24, 2024, with ongoing monitoring and reporting obligations. Similarly, on November 27, 2025, the UK’s Prudential Regulation Authority and Financial Conduct Authority jointly published a policy statement amending bilateral margining requirements, implementing an indefinite exemption for single-stock equity options and index options.
In accordance, paragraph 7(e) of Part III of Schedule 10 to the Code of Conduct will be amended and gazetted in due course.
For any inquiries regarding this circular, please contact your case officer.
View the full article:Source
