SFC sets preparation timetable for Hong Kong derivatives ID regime

The SFC roadmap sets the preparation sequence for Hong Kong’s exchange-traded derivatives investor identification regime, with implementation scheduled for the second quarter of 2028 subject to market readiness, system testing and market rehearsals.

For licensed corporations and registered institutions, the immediate decision is whether consent, client-data and order-management work can begin before the launch condition is met. The circular is a roadmap, not the final Code of Conduct obligation: the SFC says relevant intermediaries will become subject to HKIDR-DM requirements upon implementation, while the new paragraph 5.6A remains to be gazetted.

The control begins with the client account

HKIDR-DM will operate at the trading level for futures contracts, options contracts and stock options submitted to the Hong Kong Futures Exchange trading system through relevant client accounts.

Its mechanism links each relevant client to covered orders through a Broker-to-Client Assigned Number, or BCAN, and makes the associated client identification data available through a central repository. The circular says the requirements are similar to those already set out in the securities-market investor identification regime, but does not reproduce every technical or conduct detail of that regime.

Under paragraph 3 of the circular, relevant regulated intermediaries must:

- assign a BCAN to each relevant client placing, or intending to place, covered orders;
- collect up-to-date client identification data and submit it with the BCAN in a BCAN-CID Mapping File to a central repository maintained by HKEX;
- include the BCAN in the order information sent to the HKFE Trading System; and
- apply data privacy and security measures to the collection, transmission and storage of the information.

The order-management decision is therefore tied to the client-record decision. A covered order cannot be prepared for transmission without the required BCAN information, while the mapping file must connect that code to current client identification data.

Individual clients require written or other express consent for the collection and transfer of personal data to HKEX and the SFC. The circular says consent is not required for corporate clients for that personal-data purpose.

Firms must determine which individual clients need fresh consent and whether existing consent already covers all purposes specified by the SFC’s separate [Consent Circular](http://apps.sfc.hk/edistributionWeb/gateway/EN/circular/openFile?refNo=26EC60). Consent may be obtained through signed paper acknowledgement, email, other electronic means or telephone, subject to the requirements in that circular.

The timetable makes readiness an account-data exercise

The SFC’s schedule starts in the third quarter of 2026. Until the fourth quarter of 2027, relevant intermediaries are expected to obtain appropriate consent and update individual and corporate client identification data.

System enhancements run through the third quarter of 2027. They must support BCAN tagging for trade orders and submission of BCAN-CID Mapping Files through HKEX’s Electronic Communication Platform, alongside preparation for HKEX’s Orion Derivatives Platform.

The remaining sequence is fixed in the roadmap:

- BCAN assignment and mapping-file preparation: the third and fourth quarters of 2027;
- end-to-end testing and market rehearsals: the third and fourth quarters of 2027;
- submission of BCAN-CID Mapping Files to HKEX’s data repository: the fourth quarter of 2027 through the first quarter of 2028; and
- scheduled implementation: the second quarter of 2028.

This sequence makes the first operational task an inventory of covered derivatives accounts. Firms must identify missing or outdated CID, determine which individual clients require consent and preserve evidence that the resulting data can be mapped and submitted through the required channel.

The circular directs intermediaries to HKEX’s Information Paper and file-interface specifications for operational and technical requirements. It also points to the Consultation Conclusions and the to-be-gazetted paragraph 5.6A of the SFC Code of Conduct. Those materials will supply detail that the roadmap itself does not reproduce.

The SFC and HKEX will organise training sessions from the fourth quarter of 2026 to assist preparation and promote investor understanding of the consent requirements. Training supports implementation; it does not replace testing or rehearsals.

The launch condition remains open

The circular does not make the second-quarter 2028 date unconditional. It expressly ties implementation to market readiness and successful completion of system testing and market rehearsals.

That qualification limits what can be concluded from the roadmap today. The document sets preparation tasks and target windows, but it does not specify that incomplete records will automatically close an account or deny a client access. Nor does it itself establish every eventual technical or conduct consequence.

The immediate control question is whether each intermediary can complete the account-data and consent work before the mapping-file submission window opens. For individual clients, the firm must obtain appropriate consent or verify that existing consent covers the SFC’s specified purposes. For all relevant clients, it must update the required identity information and prepare the mapping file.

The next evidence will be system testing and market rehearsals in the third and fourth quarters of 2027. Their successful completion, together with the SFC’s assessment of market readiness, will determine whether the scheduled second-quarter 2028 implementation proceeds as planned.