SFC consultation on enhancements to the position limits regime
Published: 01 November 2016
The Hong Kong Securities and Futures Commission (SFC) are currently consulting upon Proposed Enhancements to the Position Limit Regime and the Associated Amendments to the Securities and Futures (Contracts Limits and Reportable Positions) Rules and Guidance Note on Position Limits and Large Open Position Reporting Requirements. Under the proposals, designed to encourage a greater volume of derivatives trading to be undertaken on-exchange, the cap on the excess position limit that may be authorized by the SFC would increase from 50% to 300% of the statutory position limit. It is also proposed that the statutory position limit for stock options contracts would triple to 150,000. This would facilitate the implementation of the proposals in the Hong Kong Exchanges and Clearing Limited's market consultation concluded in June 2016. In addition, new excess position limits are proposed for index arbitrage activities, asset managers and market makers of exchange-traded funds. The deadline for responses is 21 November 2016. If you have any questions or comments you would like to raise in the context of an AIMA response, please contact Kher Sheng Lee.