Hong Kong Exchanges and Clearing Limited (HKEx) will abolish on 1 June this year the interest retention rates for cash margin collateral deposited with the HKFE Clearing Corporation Limited (HKCC) and the SEHK Options Clearing House Limited (SEOCH)*, wholly-owned members of HKEx group, and it will reduce the accommodation charges for non-cash collateral deposited with HKCC and SEOCH.

HKEx announced plans for the changes on 16 March this year in a news release. The interest retention rates of HKCC and SEOCH are now 1.2 per cent and 2 per cent respectively.

From 1 June this year, Participants will receive interest rebates on their cash margin deposits at the prevailing bank savings deposit rate (if the bank savings deposit rate is negative, Participants will be charged the corresponding rate). In addition, the accommodation charges levied by HKCC and SEOCH on utilised non-cash collateral deposited with them will be reduced from 1.2 per cent and 2 per cent respectively to 0.5 per cent.

The prevailing bank savings deposit rate for cash margin deposits in Hong Kong dollars will be based on the Mandatory Provident Fund Schemes Authority's Capital Preservation Fund rate, which is equivalent to the simple average deposit saving rates of the three notes-issuing banks in Hong Kong. The prevailing bank savings rate for cash margin deposits in other currencies will be based on the three note-issuing banks' savings deposit rates for the currencies.