HKEX to Automate Large Open Position Reporting Process

Source: Regulation Asia Editors, Regulation Asia 2020-06-12

Starting in September, participants will be able to fully automate the LOP reporting process, using the Secure File Transfer Protocol (SFTP) facility.

HKEX (Hong Kong Exchanges and Clearing) has announced it will launch a fully-automated solution for LOP (Large Open Position) reporting in September, as part of its efforts to further enhance the client experience.

Under current rules, participants holding futures and options positions in excess of the reporting level for their own accounts or for any client are required to file a LOP report by 12.00 noon of the next business day after the positions are opened or accumulated.

LOP reports must continue to be filed for as long as the participant holds positions in excess of the reporting level.

Further, participants with open positions exceeding 60% of the position limit of stock index futures and options products with the same underlying index are required to report all outstanding positions in the products concerned, including those that are below the LOP reporting level.

Currently, LOP reporting is done through a web-based platform – the Electronic Communication Platform (ECP).

Starting in September, participants will be able to fully automate the LOP reporting process, using the Secure File Transfer Protocol (SFTP) facility.

Participants interested in using the SFTP facility for LOP reporting at launch are required to register online by 17 July. HKEX will invite registered users to participate in the market rehearsal.

In February, HKEX directed participants to make improvements to address findings of inadequate communications with clients on prescribed position limits, LOP reporting and the responsibilities of reporting – among other deficiencies.

HKEX also found that some firms were using an inappropriate aggregation methodology for identifying reportable positions, inadequate written policies and procedures covering position limit monitoring and LOP reporting, and inadequate staff training on the reporting rules.

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HKEX

HKEX to Automate Large Open Position Reporting Process

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