Some market participants say that some corporations should be granted exemptions from Hong Kong's margin requirements on swaps that are not cleared. "Currently, banks enter frequently into OTC derivatives trades with an end-client on a no-margin basis because of other banking relationships the client has in place with the bank," said Keith Noyes, Asia-Pacific regional director for ISDA. "Requiring the client to place margin on uncleared OTC positions ties up the client's working capital and puts stress on the corporate's internal systems for managing cashflow, to a point that could lead them not to do any hedging altogether."

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