New margin rules from March to hike trading cost in HK, S'pore, Australia

Hong Kong

HONG Kong, Singapore and Australia will introduce strict new rules for trading over-the-counter (OTC) derivatives on March 1, as the three jurisdictions look to implement international reforms drawn up in the wake of the 2008-2009 global financial crisis, regulators said on Tuesday.

The global rules, which will require dealers to post and collect collateral or "margin" against OTC trades, are set to dramatically raise the cost of trading in the US$500 trillion global swaps market.

The Hong Kong Monetary Authority (HKMA), the Monetary Authority of Singapore (MAS), and the Australian Prudential Regulation Authority (APRA) said in notices published on their websites on Tuesday that they would each phase in the new margining requirements as of March 1 with a six-month implementation …