As a global exercise to harmonise OTC derivatives trade reporting data, many jurisdictions, including Hong Kong, are working to implement global reporting standards, such as the UTI, at different implementation timelines.
In December 2022, Commodity Futures Trading Commission (
CFTC) of the US will become the first major jurisdiction to go live on UTI. From then on, there will be a global transitional period where some jurisdictions will start to mandate the reporting of UTI while other jurisdictions still require the reporting of existing trade identifiers, such as the Unique Trade ID (
TID).
Due to the cross-border nature of OTC derivatives transactions, market participants will face reporting challenges during this global transitional period because of difference in reporting practices and in the UTI implementation timelines in different jurisdictions. The HKMA and the SFC understand from the industry (including an industry association, an international trade repository and some individual market participants) that market participants are requesting regulators to adopt various approaches for the transitional period including reporting the UTI to be implemented by the CFTC in December 2022 in the data fields of “UTI-USI”, “UTI-TID” and “Global UTI” before Hong Kong mandates the reporting of UTI. However, currently there is no industry consensus on a common approach.
To respond to this request and meet the industry’s needs, the HKMA and the SFC will adopt an accommodative arrangement to allow reporting entities to report the UTI to be implemented by other jurisdictions in any of the data fields of “UTI-USI”, “UTI-TID” or “Global UTI” according to their own reporting practices until Hong Kong mandates the use of UTI.
In doing so, the HKMA and the SFC strongly encourage reporting entities to actively communicate with their counterparties to pre-agree on an approach to report the UTI to minimise any unlinked or unmatched trades as far as possible. Reporting entities are expected to continue to report information accurately and timely, and follow up any data quality issues on information reported to the HKTR.
For questions about the service, operation and testing arrangement of the HKTR, please contact the HKTR at 8100 3115 or email to
hktr@hkma.gov.hk. For questions about the policy or regulatory requirements, please email to
fss@hkma.gov.hk (for Authorised Institutions and Approved Money Brokers) or to
otc_enquiries@sfc.hk (for Licensed Corporations and Central Counterparties).