The Hong Kong Securities and Futures Commission has approved that starting from November 2, Bond Connect bonds and others can be used as non-cash collateral.

The Hong Kong Securities and Futures Commission has approved that, starting from the 2nd of next month, the SEHK Options Clearing House and the HKFE Clearing Corporation under HKEX (00388) will accept Chinese government bonds and policy financial bonds held through Bond Connect Northbound Trading (collectively referred to as Bond Connect bonds), as well as offshore-issued bonds issued by China's Ministry of Finance (MOF bonds), as eligible non-cash collateral to meet margin requirements. For MOF bonds, house accounts and client accounts may use such bonds as collateral; for Bond Connect securities, house accounts, individual client accounts, and individual client dealer accounts may use such securities as collateral. From the 2nd of next month, the financing fee for non-cash collateral (including Chinese government bonds) will be reduced from 0.25% per annum to 0.15% per annum, calculated on the value of the non-cash collateral used to meet margin requirements after applying the relevant haircut rates. This enhancement further implements the arrangements announced by the SFC, the Hong Kong Monetary Authority, and the People's Bank of China on July 7, accepting Bond Connect bonds as eligible non-cash collateral for Hong Kong's derivatives market.