Overview
Reporting Levels are one of three limit types monitored by the Position Limits service, alongside Position Limits and Accountability Levels. More information about each limit type can be found here.
Unlike the other limit types, crossing a Reporting Level creates a regulatory reporting obligation. When a position reaches or exceeds a Reporting Level, the position holder may be required to submit a report to the relevant regulator.
At present, FundApps monitors Reporting Levels for the Hong Kong jurisdiction only.
What are Reporting Levels?
Reporting Levels define position thresholds and require reporting when those thresholds are crossed.
They differ from other limit types in the following ways:
Position Limits:
Must never be breached unless an exemption applies.Accountability Levels:
Act as warning thresholds. Depending on the contract and market, action may be required, but this is not always mandatory.Reporting Levels:
Require explicit action. When crossed, a regulatory report must be filed.
What Action is Required When a Reporting Level Is Crossed?
As the name suggests, if a position reaches a Reporting Level, a report must be made to the relevant regulator.
The Reporting Levels monitored in FundApps relate to the Hong Kong jurisdiction.
Some clients use brokerage services that submit these reports on their behalf. You should confirm with your broker whether they handle this obligation or whether the responsibility rests with you directly.
What to Do After Crossing a Reporting Level
If the reporting obligation falls to you, you should file a Large Open Positions (LOP) report with HKFE/SEHK, whichever is the relevant market. The LOP report is found at this link under the heading, LOP Report Templates.
The LOP report should be submitted electronically via ECP. The links to do are found at this link under the heading Electronic Submission of LOP report.
The LOP report must be submitted no later than 12:00 noon of the next business day after the positions are opened or accumulated.
You must continue to file a LOP report for as long as the HKFE Participant / Options Exchange Participant holds positions in excess of the Reporting Level.
Learn More
For more information about Hong Kong reporting limits, please see the FAQ on this topic at this link.