LONDON, Dec 9 (Reuters) - Hong Kong is planning to launch central clearing of off-exchange traded derivatives by the end of 2012 to meet a global deadline, its top securities regulator said on Thursday.
"We hope a central counterparty will be set up by the end of 2012," Martin Wheatley, chief executive of the Hong Kong Securities and Futures Commission, told Reuters.
Wheatley said the move is part of Hong Kong's efforts to meet commitments made by the Group of 20 leading developed and emerging market countries to centrally clear and report off-exchange traded derivatives to repositories by the end of 2012.
Clearing houses in Europe and the United States have already begun to clear credit default swaps amid a global regulatory push to inject more transparency into a sector found at the heart of the financial crisis.
Wheatley will detail his derivatives plans next week.
Clearing will initially focus on some of the more standardised contracts, he said.
Initially it will handle contracts traded in Hong Kong but over time Wheatley expects it to broaden out to wider China.
He said the Asian derivatives market is tiny compared with Britain and the United States but clearing "is something we feel we need to introduce".
Markets in China were expanding rapidly, with the volume of shares traded in Shanghai in October larger than combined volumes in Britain and the United States, he said.
Wheatley is due to step down in June 2011 at the end of his second three-year term.
He declined to comment on speculation he may join Britain's Financial Services Authority, which has seen many top officials leave ahead of a sweeping reform of UK financial supervision, or join a new pan-European Union securities supervisor being launched in January. (Reporting by Huw Jones; Editing by Jon Loades-Carter)