Strengthening Margin Securities Support System at HKEX
HKEX Announces Margin Collateral Arrangement Enhancements
Hong Kong Exchanges and Clearing Limited (HKEX) has unveiled a series of enhancements to its margin collateral arrangements at its securities and derivatives clearing houses. These changes are aimed at boosting market efficiency and lowering costs for market participants.
The new arrangements will align across Hong Kong Securities Clearing Company Limited (HKSCC), HKFE Clearing Corporation Limited (HKCC), and The SEHK Options Clearing House Limited (SEOCH), and will apply across all currencies that are accepted as collateral and across all clearing houses.
One of the key changes involves the handling fee for cash collateral. Starting from October 2025, the fee will be set at 0.8% and will decrease 10 basis points each year until reaching 0.5% by the end of 2028. The new interest payment policy and accommodation charges, approved by the Securities and Futures Commission (SFC), will take effect from the same date.
Interest payments and charges for cash collateral will be calculated daily based on an approach that aligns with international peers, paying an overnight reference rate, less a handling fee. For non-cash collateral, the annual accommodation charge will be reduced to 0.25%.
Vanessa Lau, HKEX Chief Operating Officer, stated that the new arrangements will enhance collateral efficiency and better support market participants in executing their trading strategies and managing their investment risks. The enhancements also aim to boost market efficiency and lower costs for market participants.
The new arrangements include recent increases to the position limits for stock options and index derivatives, increasing the capacity for cleared positions while enhancing the capital efficiency of holding these positions.
HKEX will also lower accommodation charges for non-cash margin collateral posted at its clearing houses. International peers similar to the interest reference procedure for cash margin collateral at HKEX include CME Group, Eurex, and ICE Futures, which use comparable margining and collateral management practices.
The new arrangements are subject to the terms and conditions outlined in the circulars published by HKSCC, HKCC, and SEOCH. Further information can be found in these circulars.
These changes are part of HKEX's ongoing efforts to boost market efficiency and lower costs for market participants. The new arrangements are expected to provide a more efficient and cost-effective collateral management system, benefiting all market participants.
