HKEX launches risk management system for derivatives

Risk management system allows derivatives traders to set limits on exposure to risk in real-time.

Hong Kong Exchanges and Clearing Limited (HKEX) has announced the launch of a risk management system for derivatives traders.

The Pre-Trade Risk Management (PTRM) system will help derivatives market participants “meet their needs for pre-trade controls while complimenting their in-house risk controls”, HKEX said.

The exchange explained the PTRM system helps “prevent the unintended build-up of excessive positions”, by setting limits to manage exposure to risk in real-time.  

Roger Lee, HKEX’s head of markets, said the new system is an “important addition to the market infrastructure at HKEX…”

Lee added the launch was also part of HKEX’s efforts to promote the stability of Hong Kong’s financial markets.

HKEX’s PTRM was introduced earlier this month, and a two-week stabilisation period ended after trading closed on 22 April.