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Hong Kong prepares boost to equity derivatives booking
Proposed revamp of large exposure limits would allow netting to reduce capital charges
![hong-kong_Getty-web.jpg](/sites/default/files/styles/landscape_750_463/public/2018-02/hong-kong_Getty-web.jpg.webp?itok=biVV139e)
The Hong Kong Monetary Authority (HKMA) is set to push through new rules allowing banks to net their equity derivatives positions when calculating large exposure limits, in a move likely to boost the city-state’s allure as a derivatives-booking hub.
Under current regulation, in place since 1997, a bank’s exposure to a single counterparty – or counterparties contained in a single corporate group – cannot exceed 25% of the bank’s capital base at all times. While this is in line with global rules
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