HKEx applies deeper haircuts on US T-bills used as collateral


HONG KONG, Oct 10 (Reuters) - Hong Kong Exchanges & Clearing(HKEx) will apply a deeper discount on U.S. Treasuries used asmargin collateral, according to a circular from the clearinghouse effective from Thursday.

While the circular did not give a reason for the change, agovernment shutdown in the United States has raised concernsabout the outcome of talks to raise the debt ceiling there andprevent a default on U.S. government paper.

HKEx, the holding company for The Stock Exchange of HongKong Ltd, Hong Kong Futures Exchange Ltd and Hong KongSecurities Clearing Company Ltd, will now apply a haircut of 3percent versus the current 1 percent for bills with a maturityof less than a year. The haircuts applied to longer-dated billsremain unchanged.

"Participants should make necessary funding arrangements tocover any shortfall to their margin requirements resulting fromthe increase in the U.S. Treasuries haircut," the clearing housesaid.

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