Currently direct access to HKATS, Hong Kong Futures Automated Trading System, is reserved for Exchange Participants, which must be Hong Kong incorporated companies. The RTA rules allow Exchange Participants which are also HKFE Clearing Corporation Limited (HKCC) Participants to apply for two types of overseas clients to become Remote Access Clients (RAC) and obtain direct access to HKATS: clients that conduct proprietary trading solely; or clients that are affiliates of Exchange Participants. Affiliates of Exchange Participants are subsidiaries of an Exchange Participant, the holding company of an Exchange Participant and subsidiaries of the holding company of an Exchange Participant. HKCC is the wholly-owned member of the HKEx Group.
Each Remote Access Client applicant must be regulated by the commodity or financial authority of the jurisdiction in which it carries on the trading of derivatives, and the authority must have in place a memorandum of understanding with the SFC on the sharing of regulatory information.
Exchange Participants are liable for all orders placed on HKATS by their RAC and are responsible for the clearing of all trades executed on HKATS by its RAC.
At present, direct remote access to HKATS is allowed from the United States and the United Kingdom. The Exchange believes the RTA programme will enhance business opportunities for Exchange Participants, which will be able to provide RAC trading access and information retrieval services from HKATS using approved trading applications. In addition, the programme is expected to add liquidity to the market, benefiting all market users.
