Sets out the minimum capital and financial resources, and other financial and margin requirements.
Guidelines on the Calculation of Counterparty Risk Requirement for Specified Structured Warrants under Paragraph 3(2) of the Third Schedule to the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations [FMR N02]
These guidelines apply to capital markets services (CMS) licensees:
- dealing in securities and trading in futures contracts; and
- which are members of an approved exchange or designated clearing house
in respect of capital computations before 3 April 2015 and financial returns before 1 July 2015.
They specify how counterparty risk requirement should be computed for specified structured warrants in the following scenarios:
- Contracts unsettled at the end of or after the due date;
- Open contracts traded on an approved exchange other than a securities exchange or recognised group A exchange; and
- Contract which is offset by contra contract, forced-sale or buying-in transaction.