Overview of Derivatives Regulation in Asia-Pacific

When you trade OTC derivatives with counterparties in Asia-Pacific, the legal basis for reporting and central clearing sits in a different law in each jurisdiction. Compliance and trade reporting staff need to know which law to consult, depending on the counterparty's jurisdiction or their own offices.

National laws implementing the G20 agreement

OTC derivatives regulation in Asia-Pacific is what each jurisdiction has put into its own laws to implement the 2009 G20 agreement¹. The content of the agreement (platform trading, central clearing, trade reporting, and capital and margin for trades that are not centrally cleared) and what prompted it are covered in The G20 OTC Derivatives Reforms. The scope is five jurisdictions: Hong Kong, Singapore, China, Korea, and Australia.

Implementation status in the FSB report

The Financial Stability Board (FSB) reports on the implementation of the G20 agreement by jurisdiction. The table in the report of November 7, 2022 shows the status as of September 2022 across six items². The latest progress report that the FSB's implementation page lists is still this report of November 7, 2022³.

Among the table's columns, "interim capital requirements" is an interim regime that requires banks to hold more capital against OTC derivatives that are not centrally cleared. In the 2022 report, it was in force in all 24 FSB jurisdictions⁴.

The next table shows the status of the five jurisdictions as of September 2022. "Implemented" means that the legal framework is in force and that the standards are in force for more than 90% of transactions. For clearing and platform trading, it also requires that an authority regularly assesses the transactions. For margin, it requires more than 90% of the transactions covered in line with each phase-in period. The numbers 3 and 1 are stages short of implementation⁵.

"Improved" marks an improvement since the end of September 2021 that the FSB's table shows². Stage 3 means that the legal framework is in force and that standards have been adopted for some transactions. Stage 1 means that the legal framework is in force or has been published as a consultation or proposal⁵.

In the same table, across all 24 FSB jurisdictions, 23 had implemented reporting, 17 central clearing, and 24 interim capital requirements. For the other three items, 18 jurisdictions had implemented final capital requirements, 16 margin requirements, and 13 platform trading².

The standards for "final capital requirements" consist of a method for calculating the capital held against counterparty credit risk, and a standard for banks' exposures to a central counterparty⁷. In Singapore, the transition period for the final capital requirements ended in December 2021⁸.

Legal basis and main authorities

The next table covers the three jurisdictions whose legal basis is shown in statutes and authorities' materials. For Singapore's Securities and Futures Act and Australia's Corporations Act, the Part and section titles (table of contents) of the versions published as of October 3, 2026 were checked.

In Hong Kong, the Securities and Futures (Amendment) Ordinance 2014 introduced the OTC derivatives framework. The SFC publishes materials on this framework⁹. In Australia, there are separate rules for trade repositories, apart from the derivative transaction rules¹³¹⁴.

Hong Kong and Singapore

In Hong Kong, on March 26, 2014, the Legislative Council enacted an amending ordinance that sets out the OTC derivatives framework. The framework was implemented in phases⁹.

Figure description

The figure arranges the main dates of Hong Kong's OTC derivatives regulation from oldest to newest. After the amending ordinance was enacted, reporting and clearing began in stages on separate dates, and the amendment to the clearing scope took effect last. The filled dot marks the date the ordinance was enacted. The spacing does not represent the length of time between dates.

Reporting began with certain interest rate swaps and non-deliverable forwards (NDFs) and later expanded to five asset classes. The scope of clearing is certain standardized interest rate swaps in Hong Kong dollars or in the G4 currencies (US dollar, euro, pound sterling, and Japanese yen). Amendments that accompany the reform of interbank offered rates took effect on July 1, 2024⁹.

Singapore's Securities and Futures Act puts the reporting, clearing, and trading of derivatives contracts in separate Parts. Each Part has sections on MAS's power to obtain information and its power to make regulations¹².

Australia

Part 7.5A of Australia's Corporations Act regulates derivative transactions and derivative trade repositories, and the clearing obligation is set out in the derivative transaction rules that ASIC makes¹³¹⁴.

Figure description

The figure checks the two conditions listed on the ASIC page in order. A no to either puts the transaction outside the conditions shown on that page, and a yes to both means it is subject to the clearing obligation. Meeting both is the case the ASIC page describes, with an obligation to use a licensed or exempted clearing and settlement facility¹⁴.

The standard for "large" is in the threshold provisions of ASIC's rules (Clearing), and the amount is shown in the footnote¹⁵. The rules also contain provisions that the figure does not show, such as an opt-in, under which a person below the threshold can notify and then be covered, and conditions on the counterparty¹⁵.

Consider a fictional example of a bank and an operating company that trade specified OTC interest rate derivatives. Bank F trades a specified OTC interest rate derivative and is also a large financial institution in ASIC's sense, so the clearing obligation applies. Company G makes the same kind of trade but is not a large financial institution, so it is not covered under the two conditions the ASIC page lists. However, there are provisions that the figure does not show, such as the opt-in, so the figure alone does not settle whether a party is covered.

The derivative transaction rules also require reporting entities to report information on OTC derivative transactions and positions to a licensed or prescribed trade repository¹⁴. The Corporations Act provides that ASIC may make rules, that there is an obligation to comply with the rules, and that ASIC supervises licensed trade repositories¹³.

China and Korea

The FSB report of November 2022 notes the following three points for China¹⁶.

Two institutions have been approved as trade repositories: the China Foreign Exchange Trade System (CFETS) and the National Association of Financial Market Institutional Investors (NAFMII).

Rules issued by the Securities Association of China (SAC) in December 2021 set out, for securities firms that conduct OTC swaps, dealer requirements, investor eligibility, margin, trade reporting, and more. The related margin rules are said to apply to all securities firms that conduct OTC swaps.

A law on futures and derivatives was adopted in April 2022 and took effect in August 2022. It is said to have clarified, at the level of law, basic arrangements of the derivatives market such as the single agreement and close-out netting (a mechanism that, when a counterparty defaults, offsets the valuations of multiple trades into a single amount)¹⁷.

In Korea, from January 2022, the scope of the reporting obligation is said to have expanded from interest rate and foreign exchange OTC derivatives to include equity, credit, and commodity OTC derivatives¹⁸.

Common points and differences

The common points and differences among the five jurisdictions are as follows.

• The common point is that all five jurisdictions had implemented reporting, central clearing, and interim capital requirements. Of the FSB's 24 jurisdictions, 23 had implemented reporting, and the five are among them².
• Four jurisdictions had implemented final capital requirements and margin requirements, and three had implemented platform trading, so progress differed. China was at a stage short of implementation on three items, and Korea on platform trading².
• The way the scope of clearing is defined differs by jurisdiction. Hong Kong defines it by the type of transaction and currency (certain standardized interest rate swaps), while Australia specifies the covered transactions (specified interest rate derivatives) and the covered parties (large financial institutions)⁹¹⁴.
• The way regulation is laid out also differs. Hong Kong uses rules under an ordinance, Singapore uses Parts within an Act, and Australia uses rules that ASIC makes under the Act¹⁰¹²¹³.

After the 2022 report, the FSB reports on implementation in its annual report³.

Scope not covered

• The statutes and authorities of China and Korea are not covered on this page.
• The roles of Hong Kong authorities other than the SFC are not covered on this page.
• The transactions and parties that Singapore's clearing and reporting rules cover, and the content of each section, are not covered on this page.
• The scope of "specified" in Australia and the other conditions that the figure does not show are not covered on this page.
• Amendments in each jurisdiction after September 2022 are not covered on this page.

Notes

1. Financial Stability Board, "Review of OTC derivatives market reforms" (June 29, 2017), page 2, 1.1 (the launch at the 2009 Pittsburgh Summit), and page 7, 2.2 (the five commitments). ↩

2. Financial Stability Board, "OTC Derivatives Market Reforms: Implementation progress in 2022" (November 7, 2022; hereafter "the 2022 progress report"), page 2, Table 1, the rows for the five jurisdictions and the "Blue" row of "Totals". "Blue" is "Implemented", and "(+)" is an improvement. ↩ ↩² ↩³ ↩⁴ ↩⁵

3. Financial Stability Board, "Making Derivatives Markets Safer – Implementation", the list of "Progress Reports" (the latest is the 2022 progress report) and the opening statement (implementation is reported in the annual report). Checked on October 3, 2026. ↩ ↩²

4. The 2022 progress report, page 5 (in force in all 24 jurisdictions). The description as an interim regime that requires banks to hold more capital is based on Financial Stability Board, "Review of OTC derivatives market reforms", PDF pages 7 and 8. ↩

5. The 2022 progress report, page 8, Annex, Table A "Jurisdictional reform implementation classification scheme", Legend. The definitions of Blue, 3, and 1. ↩ ↩²

6. The 2022 progress report, page 8, Annex, Table A "Jurisdiction codes". ↩ ↩²

7. The 2022 progress report, page 5, "Higher capital requirements for non-centrally cleared derivatives". Based on its description of the components of the final capital requirements. ↩

8. The 2022 progress report, page 5 and footnote 10. The end of Singapore's transitional measures (December 2021). ↩

9. Securities & Futures Commission of Hong Kong, "OTC derivatives regulatory regime" page, main text (checked on October 3, 2026). The enactment of the amending ordinance on March 26, 2014, the start dates of reporting and clearing, and the "Primary Legislation" list. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

10. The same page, the "Subsidiary Legislation and Gazette Notices" list. The rules Cap.571AL (reporting) and Cap.571AN (clearing). ↩ ↩² ↩³

11. Singapore Statutes Online, "Securities and Futures Act 2001" (current version as at October 3, 2026), section 2 (Interpretation), the definition of "Authority". ↩ ↩²

12. Singapore Statutes Online, "Securities and Futures Act 2001", table of contents. Part 6A (sections 124 to 129A), Part 6B (sections 129B to 129H), and Part 6C (sections 129I to 129O). Each Part has sections on the power to obtain information and the power to make regulations. ↩ ↩² ↩³ ↩⁴

13. Federal Register of Legislation, "Corporations Act 2001", table of contents, Part 7.5A. Sections 901A (making rules), 901E (the obligation to comply), 902A (supervising trade repositories), and 903A (trade repository rules) (checked on October 3, 2026). ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

14. Australian Securities and Investments Commission, "OTC derivatives" page, main text (checked on October 3, 2026). The paragraphs on reporting, trade repositories, and central clearing. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸

15. Federal Register of Legislation, "ASIC Derivative Transaction Rules (Clearing) 2015" (Compilation No. 6), rules 1.2.7 (threshold: aggregate gross notional of AUD 100 billion or more on two consecutive determination dates), 1.2.8 (opt-in), and 1.2.5 (conditions on the counterparty). ↩ ↩²

16. The 2022 progress report, page 3 and footnote 5 (trade repositories), page 5 and footnote 11 (margin requirements and the securities firms' rules), and page 6 (the law on futures and derivatives). ↩

17. The explanation of close-out netting is a general explanation of the concept, not a definition in Chinese law. The FSB report does not describe the mechanism. ↩

18. The 2022 progress report, page 3, "Trade reporting". ↩