Hong Kong Exchanges and Clearing Limited (HKEX) is today (Monday) pleased to announce enhancements to the client margin framework at its derivatives clearing houses, aimed at improving capital efficiency, lowering funding costs for market participants and supporting the long-term development of Hong Kong’s derivatives market.
Under the revised arrangements, the client margin multiplier and client maintenance margin will be adjusted in two phases to ensure market readiness and facilitate a smooth transition under prevailing market conditions. Phase 1 is planned for 21 September 2026, while Phase 2 is targeted for March 2027, subject to regulatory approval.
HKEX Chief Operating Officer, Vanessa Lau, said: "We are delighted to present these adjustments to our client margin framework, the latest in our microstructure enhancements as part of HKEX’s ongoing commitment to elevate the vibrancy, resilience and competitiveness of Hong Kong’s markets. Building on earlier enhancements to margin collateral arrangements, the revised framework strengthens collateral efficiency whilst maintaining robust risk controls. It supports more efficient use of capital, lowers costs and enables market participants to better manage their hedging, trading and portfolio activities, further strengthening Hong Kong’s position as an international risk management centre."
Currently, client initial margin requirements are set with reference to clearing house (CH) margin levels. The table below summarises the current arrangements and the phased adjustments under the revised framework.
|
Client Margin1
|
Current
|
Phase 1
(21 September 2026)
|
Phase 2
(Target: March 2027)
|
|
Client initial margin
|
1.33 x CH margin
|
1.2 x CH margin
|
1.1 x CH margin
|
|
Client maintenance margin
(derivatives except stock options)
|
80% x client initial margin
|
1.0 x CH margin
|
1.0 x CH margin
|
|
Client maintenance margin
(stock options)
|
Equivalent to client initial margin
|
Equivalent to client initial margin
|
1.0 x CH margin
|
The phased approach supports an orderly transition, enabling market participants to adjust their systems and risk management practices in a measured manner, while at the same time promoting market stability and continuity. Participants will continue to have the discretion to apply higher client margin requirements based on client risk profiles, product characteristics and prevailing market conditions.
The revised client margin framework will also bring Hong Kong’s client margin multiplier more closely in line with those of other major international markets, supporting the continued development of its listed derivatives market.
These enhancements also support HKEX’s ongoing efforts to deepen and broaden its derivatives ecosystem to meet the evolving needs of investors and risk managers. Looking ahead, HKEX remains fully committed to further enhancing its market infrastructure and clearing arrangements to support product innovation and the efficient deployment of capital across its listed derivatives market.
Please refer to the circulars published by SEHK, SEOCH, HKFE and HKCC today for further information.
Note:
- Client margin may apply to the context of, including but not limited to, margin being due from a Non-Clearing Participant to its General Clearing Participant and required from a client to an Exchange Participant.
About HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code:388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metal Exchange.
As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of the world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.
HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.
www.hkexgroup.com
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