SFC consults on financial resources rule enhancements to foster market developments for OTC derivatives and other products

On July 14, 2025, the Securities and Futures Commission ("SFC") initiated a public consultation on proposed amendments to the Securities and Futures (Financial Resources) Rules ("FRR") and associated guidelines. These amendments aim to introduce internationally comparable capital requirements for licensed corporations ("LCs") engaging in over-the-counter derivative activities (OTCD capital requirements). The proposed changes include adjustments based on recent updates to Hong Kong's Banking (Capital) Rules and the Basel Framework, as well as a reduction in capital requirements for inter-dealer brokers and streamlining of transfer pricing treatments for LCs.

In addition to the OTCD capital requirements, the SFC has proposed several modifications to the FRR to support the business development and diversification of LCs. These changes facilitate LCs’ trading of stocks in Mainland China and emerging markets, commodities, carbon products, and digital asset futures and options on licensed virtual asset trading platforms. To bolster Hong Kong's development as a regional fixed-income and currency hub, the SFC has also proposed exempting capital requirements for centrally-cleared repurchase transactions (repos) to encourage central clearing and the growth of the city’s inter-dealer repo market.

Dr. Eric Yip, the SFC's Executive Director of Intermediaries, emphasized the importance of aligning Hong Kong's OTCD capital requirements with global standards to reinforce the city's status as an international financial center. He expressed confidence in the forward-looking and inclusive nature of these proposals, anticipating they will promote innovation and support the sustainable development of Hong Kong’s offshore RMB, FICC, and digital asset markets.

Simultaneously, the SFC has published conclusions on certain previously consulted changes to the FRR. The public is invited to submit written comments on this consultation by October 13, 2025, via the SFC website (www.sfc.hk), by email to This email address is being protected from spambots. You need JavaScript enabled to view it., by post, or by fax to 2523 4598.