On 26 Sep 2025, the HKMA announced enhancements to the RMB Liquidity Facility effective 9 October 2025, reallocating intraday and overnight funding to RMB 30 billion and RMB 10 billion respectively while introducing two-week and one-month repo tenors for T+1 settlement. The changes maintain the total facility size at RMB 40 billion and preserve existing collateral rules, interest rate structures, and operational protocols to better support growing RMB settlement volumes and funding flexibility for banks.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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
Market Misconduct Tribunal: A Guide to Penalties and Other Consequences for Misuse of Insider Information
Market Misconduct Tribunal proceedings for mishandling of insider information can result in fines and disgorgement orders
SPOTLIGHT ON
FAMILY OFFICES
Key Enhancement Details
On 26 Sep 2025, the HKMA announced the enhancement of the Renminbi (RMB) Liquidity Facility effective 9 October 2025, which will reallocate intraday and overnight funding resources and introduce extended repo tenors to better support growing RMB settlement volumes and funding demands in Hong Kong. The enhancement reallocates the intraday and overnight funds from RMB 20 billion each to RMB 30 billion and RMB 10 billion respectively, maintaining the total facility size at RMB 40 billion. Separately, the facility will be expanded to include two-week and one-month repo transactions for T+1 settlement, with interest rates referencing prevailing market rates, while the Primary Liquidity Providers scheme remains unaffected.
Operational and Structural Updates
The updated facility will allow Participating Authorized Institutions to access two-week and one-month repo tenors via the CMU Member Terminal, with transactions initiated before 12:00 noon Hong Kong business hours. Funds will be credited on T+1 subject to securities receipt by 4:00 pm, and maturity dates will be adjusted for Hong Kong or Mainland holidays. The interest rate for the new tenors will be based on prevailing market rates, with payment made upon repurchase of securities. Existing collateral requirements, haircut calculations, and operational procedures for intraday and overnight repos remain unchanged.
Existing Framework Preservation
The enhancement does not alter the existing collateral framework, which continues to permit Exchange Fund Bills and Notes (EFBN), HKSAR Government bonds (HKGB), and specified RMB/USD/EUR debt securities issued by Chinese government entities and policy banks. Haircut calculations for eligible collateral (2% per year of remaining maturity plus 2% for currency risk) and interest rate methodologies for intraday/overnight repos (based on CNH HIBOR with minimum rates) are maintained. The requirement for Participating Authorized Institutions to sign a bilateral Master Sale and Repurchase Agreement with the HKMA remains in effect.
View the full article:Source
