Hong Kong Exchanges and Clearing Limited (HKEX) has announced a series of enhancements to its margin collateral arrangements across its securities and derivatives clearing houses. The reforms, approved by the Securities and Futures Commission (SFC), will take effect from 2 October 2025, and are designed to improve market efficiency while lowering costs for market participants.
The key change involves a shift in how HKEX calculates interest on cash margin collateral. Going forward, payments will be calculated daily based on an overnight reference rate minus a handling fee. The approach, which brings HKEX in line with international peers, will apply across HKSCC, HKFE Clearing Corporation Limited (HKCC), and The SEHK Options Clearing House Limited (SEOCH) in all accepted collateral currencies.
The handling fee will initially be set at 0.8% between October 2025 and December 2026. It will then be gradually reduced by 10 basis points per year until reaching 0.5% by the end of 2028.
For non-cash margin collateral, HKEX will lower the annual accommodation charge from 0.5% to 0.25%. This move is expected to ease cost pressures on market participants who rely on securities as margin collateral, while also encouraging broader participation in derivatives trading.
“HKEX is fully committed to continuously elevating the vibrancy, resilience, and competitiveness of Hong Kong’s markets, and we are pleased to be announcing these new arrangements that will enhance collateral efficiency,” said Vanessa Lau, Chief Operating Officer of HKEX. “These enhancements will better support market participants in executing their trading strategies and managing their investment risks. Taken together with the recent increases to the position limits for stock options and index derivatives, the capacity for cleared positions has materially increased while the capital efficiency of holding these positions is also being enhanced.”
The enhancements follow HKEX’s recent initiatives to expand position limits for stock options and index derivatives, measures aimed at bolstering Hong Kong’s role as a global risk management centre. By improving both capacity and capital efficiency, HKEX hopes to make the city a more attractive hub for global investors seeking reliable and cost-effective trading infrastructure.
Market observers note that aligning collateral arrangements with global benchmarks helps HKEX remain competitive with other international clearing venues. For traders and institutions, the daily calculation of interest on cash collateral and the lower non-cash charges are expected to translate into tangible cost savings, while also promoting better risk management practices across the marketplace.
The changes come at a time of heightened global market volatility, with exchanges and clearing houses under pressure to provide efficient, transparent, and resilient infrastructure. HKEX’s reforms position it as a forward-looking player that can support both regional and global market participants with cost-effective solutions.
