S UBSIDIARITY A L EADERSHIP P RINCIPLE FOR G OOD W ORK S T. V INCENT H EALTH.
HKFE Clearing Corporation Limited Principles for … · Del N Hon Exc Ent Fin Sec Hon E Hon CL Hon...
Transcript of HKFE Clearing Corporation Limited Principles for … · Del N Hon Exc Ent Fin Sec Hon E Hon CL Hon...
HKFE Clearing Corporation Limited
Principles for Financial Market
Infrastructures Disclosure
December 2014
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Principle 6:
Principle 7:
Principle 8:
Principle 9:
Principle 10:
Principle 11:
Principle 12:
Principle 13:
Principle 14:
Principle 15:
Principle 16:
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HKCC ument round
age 12
ved by
grated
g and
anage
sis for
to the
cipant
current
ple 6:
es are
to the
role as
ription
et and
efer to
f their
ents;
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efer to
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cipants are r
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atisfy liquidity
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val in writing
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of HKCC, su
Hong Kong
aspect of HK
cts of its acti
collateral an
HKCC Partici
above, the
also include
HKCC ument round
age 13
eguard
y and
ments
C and
proval
MS, its
ay as
wing a
action
es.
ry and
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under
es, the
uch as
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KCC’s
ivities.
nd RF
pants,
legal
es the
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procedures f
CC must at a
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for ensuring
all times prov
d premises;
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the interest
c prevails wh
re HKCC to
atutory duties
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nance (CSS
ality of EFN
to contracts,
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of Part III of th
as is reasona
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HKCC ument round
age 14
aws of
n final
KCC in
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Division 3 of
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onnection with
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uses achieve
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vision of “mae of realisingnt to such cos to the applic
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proceedings
conferred as
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he SFO sets
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taken by ansubject to a “ or a disposa
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solvency avo
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platform for
which is used
manage the c
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ollateral of H
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ouse Accou
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ny property whrectly in conne
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any proceedin
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CH and the
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y an RCH unde
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CHs (includin
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by an RCH fposals of prowith the rules;
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ants.
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HKCC pro
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own trades
into by the RC
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r any propertyes arising dire
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HKCC ument round
age 15
g how
atutory
market
for the operty s of an
ch the ch that e”; and
edings
to an
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KSCC,
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pose of market
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(b) two typ
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After registra
between the
the buying H
CCP, and as
known as ma
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HKCC acts a
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act as a posi
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lidated rights
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ugh HKATS. o were parties
HKCC ument round
age 16
nibus
HKCC
sitions
ents.
ateral
client
ccount
dentify
HKCC
lateral
s; and
ounts.
s and
CASS
CASS.
n, one
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ember 2014
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HKCC offers
their trades a
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completing a
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HKCC does
the Real Tim
as its settlem
currencies, i
(EUR) and J
HKCC Partic
Settlement B
to accept ins
accounts wit
HKCC uses
payments to
scheduled a
payments of
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Day-enarising settled
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he RTGS systewned by the HWIFT means t
gement
s post-trade
and positions
cipant that ha
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a stipulated
cordance wit
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not have a b
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including Ho
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cipants are re
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structions fro
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and from H
nd ad hoc m
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settlement ment (VA), m
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contracts
ettlement ofargin
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settlement o
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Hong Kong Mothe Society for
managemen
s in DCASS.
as to agree t
rticipant can
can also tra
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h the HKCC
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ong Kong do
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equired to m
oney settleme
om HKCC to
ment Banks.
o send pay
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transfer a tr
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ong Kong Interity (HKMA) annterbank Finan
to facilitate H
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nsfer funds f
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and submit
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ccounts to HK
nt Banks to
transfers, wi
settle the re
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business da
notification
otification
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HKCC ument round
age 17
anage
nother
can be
s own.
ant by
tted to
ess to
banks
ultiple
Euro
of the
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KCC’s
effect
ith the
levant
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s jointly
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ment Proce
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ithdraw the
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final settlem
ne, HKCC is
Participants
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ular basis wi
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the descriptio
Hlosure Docu
neral Backgr
Pa
Deadline
he third busitribution of
d as having
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utures contra
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ollect any m
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ness the
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sfer of
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o have
ations.
haircut
ations.
lateral
nciple
Dece
IV.
Prin
An F
eac
Mate
1.1
Lega
1.2
1.3
ember 2014
Principle-b
nciple 1:
FMI should
h material a
erial Aspects
The mate
(a) parti
(b) the r
serv
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finali
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cons
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(g) the p
(h) the i
al Soundnes
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supports
The legal
the Bankr
common
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HKCC is
securities
Kong’s p
framewor
by-principl
Legal Basis
have a well
aspect of its
s of Activitie
erial aspects
cipantship in
rights and ob
ices, includin
formation by
ity of Market
rights and in
stituting Marg
settlement fin
HKCC Rules
procedures fo
mplications o
ss
activities are
and allows
basis/frame
ruptcy Ordin
law in relatio
articipants.
s an RCH r
s and futures
principal sec
rk for HKCC
e Summary
s
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activities in
es
of HKCC’s a
n HKCC;
bligations of
ng clearing, s
y novation, e
Contracts;
nterests of H
gin, collatera
nality of Mark
and HKCC
or the recove
of the insolve
e conducted
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ework suppor
ance; Comp
on to contrac
regulated by
s markets, u
curities and
in its capacit
ry Disclosu
lear, transp
n all relevan
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f HKCC and
settlement an
enforceability
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al and RF;
ket Contracts
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ery and wind
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d in Hong K
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t require lega
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KCC; and
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Hlosure Docu
ple 1: Legal
Pa
legal basis
re:
espect of HK
nt;
nts and settle
nancial prov
s;
cipant default
.
g legal fram
ctivities as a
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binding HKC
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ut the regu
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for
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ement
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CCP.
cludes
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C and
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Hong
ulatory
Dece
1.4
1.5
1.6
ember 2014
All HKCC
laws of H
Kong law
reviewed
appropria
needed)
appropria
recipients
promote c
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s, such as m
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ents to the H
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ransparent a
urisdictions.
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C Rules and
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wyers of
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existence of
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tivities to the
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are drafted a
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Where
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Prin
An
the
syst
stak
Regu
2.1
2.2
Gove
2.3
2.4
ember 2014
nciple 2:
FMI should
safety and
tem, other
keholders.
ulatory Requ
As mentio
reasonab
settlemen
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times, pr
personne
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conduct o
to act in t
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HKCC is
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before the
ernance of H
HKEx, a
company
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statutory
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ensures
oversight
arrangem
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and clear
the SFO’
approval
executive
Financial
Governanc
have gover
efficiency o
relevant pu
uirements
oned above,
bly practicab
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ociated with
rovide and m
el, and aut
ncies or em
of its busines
the interest o
Where there
required to e
CH, HKCC’s
fee structure
ey become e
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publicly list
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4 of Part III
duty to ensu
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the proper
over the pe
ments, risk ma
opts a group
ring houses,
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e and chief
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rnance arran
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ublic interes
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ble, that the
ents for trans
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omated sys
ergencies, s
ss. In discha
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ensure that th
Articles of A
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effective.
ted company
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of the SFO.
ure, among
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functioning o
erformance
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p governanc
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ents. The a
ef Executive
operating of
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ngements th
and suppor
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petently. A
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of HKCC’s
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ce structure
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to them, hav
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ng Kong reg
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airman of H
the appointm
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point up to 8
Hlosure Docule 2: Govern
Pa
parent, prom
roader finan
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o ensure, so
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8 members
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anges
ly with
es the
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to the
Dece
2.5
2.6
2.7
15 Di
In sh
ember 2014
HKEx Bo
appropria
The HKE
Hong Kon
executive
regulated
and supe
composit
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The HKE
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matters, i
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ervised by th
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ee independe
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nce structure
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s. The HKE
of risk manag
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including the
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er to appoint
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uding HKCC,
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ctors annuall
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ected directors
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KEx Board m
ent non-exec
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gement and
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own in the S
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ly with refere
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cial Secretar
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ief executive
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terms of its
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rs;
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ces adopted
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Hlosure Docule 2: Govern
Pa
atisfied that
erest.
ncial Secret
and one ex
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HK (Listing R
sting Rules.
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ast one-third
ese requirem
he HKEx corp
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Dece
2.8
2.9
Gove
2.10
2.11
ember 2014
(d) the
advic
polic
HKEx ha
Derivative
chaired b
market pa
advice r
respective
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Code. S
sharehold
where ap
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elects to
governan
ernance of H
The HKE
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of HKEx.
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In additio
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HKCC
x Board and
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on, the HKCC
sciplinary and
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e, including b
aging HKCC
uring HKCC’s
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Hlosure Docule 2: Govern
Pa
ket expertise
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2.12
HKCC
2.13
Lega
2.14
ember 2014
(f) mak
Parti
in re
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busin
imple
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socia
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meet its oblig
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for the
endent
Dece
Conf
2.15
ember 2014
Commiss
bodies an
flicts of Inte
HKCC ha
Articles o
disclose a
abstain fr
accordan
them. T
sion Against
nd meets wit
rest Policy
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3.1
ember 2014
nciple 3:
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3.2
ember 2014
(e) Sett
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3.6
ember 2014
HKCC mo
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4.25
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5.4
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6.14
6.15
6.16
6.17
ember 2014
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7.1
Liquid
7.2
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HKCC ument y Risk
age 42
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7.3
7.4
7.5
7.6
Mana
7.7
7.8
25 Gu
ember 2014
HKEx inv
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HKCC ument y Risk
age 43
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7.9
7.10
Cont
HKCC
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7.12
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Prin
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8.1
8.2
8.3
8.4
26 Th
sethrlawhtt
ember 2014
nciple 8:
FMI should
value date.
aday or in re
HKCC ac
receiving
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nt no later tha
bligations be
HKCC Rule
e SFO. The
tlement proc
versee clearinr transactionsality from insoe HKMA web
HKCC ument nality
age 45
nd of
ment
Upon
CASS.
ce the
s and
for the
HKCC
sends
nsfers
when
in the
The
al and
ement
rocess
nd on
e DVP
ook of
al and
an the
tween
s and
e SFO
essed
ng and s made olvency site at
Dece
Prin
An
and
con
9.1
9.2
9.3
ember 2014
nciple 9:
FMI should
d available.
ntrol the cred
As descri
in HKD, R
In Hong K
Because
access to
licensed
Participan
To mana
Settlemen
appointed
of A3 or
capability
The appo
covers o
availabilit
by each
conclusiv
in writing
immediat
HKCC co
ad hoc re
HKMA lic
and man
liquidity s
the failure
Money Sett
conduct its
If central ba
dit and liqui
ibed under P
RMB, USD,
Kong, only H
HKCC is n
o the RTGS
banks as it
nts via intra-b
ge the credi
nt Banks, H
d Settlement
r equivalent
y and reliabil
ointed Settle
bligations of
ty of inward p
Settlement
ve, and may n
g by HKCC
ely available
onducts due
eviews, wher
censed bank,
ages the co
stress testing
e of HKCC S
tlements
s money se
ank money
idity risks ar
Principle 8: S
EUR and JP
HKD is settle
ot an HKMA
systems op
ts Settlemen
bank transfe
t and liquidit
HKCC applie
Bank must b
or be a H
ity, such as t
ement Bank
f the Settlem
payments.
Bank in re
not be revok
. Funds cr
e to HKCC.
diligence rev
e necessary
financial str
oncentration
g described u
Settlement Ba
ettlements in
is not used
rising from
Settlement Fi
PY with HKC
ed in central
A licensed b
perated by H
nt Banks to
rs on its beh
ty risk expos
es criteria in
be a HKMA l
KD note-iss
the ability to
is required
ment Bank,
Pursuant to
elation to cr
ked by the Se
redited to H
views of eac
y. The revie
rength and o
of exposure
under Princip
anks.
Pri
n central ba
d, an FMI sh
the use of c
nality, HKCC
CC Participan
bank mone
bank and th
HKICL, it has
o conduct m
half.
sure to the f
n selecting
icensed ban
suing bank,
meet HKCC
to sign an a
irrevocability
the agreeme
redits to HK
ettlement Ban
HKCC’s ban
h of its Settle
ew includes v
perational re
es to Settlem
ple 7: Liquid
PFMI Disclnciple 9: Mo
ank money
hould minim
commercial
C conducts m
nts through S
y across the
erefore doe
s appointed
money settle
unds held or
its Settleme
k, with a min
and with p
C’s payment
agreement w
y of transfer
ents, all conf
KCC’s accou
nk without th
k accounts
ement Banks
validations of
eliability. HK
ment Banks
ity Risk inclu
Hlosure Docuoney Settlem
Pa
where prac
mise and str
bank mone
money settle
Settlement B
e books of H
es not have
eight Hong
ment with H
r processed
ent Banks.
nimum credit
roven opera
cut-off sche
with HKCC,
rs and imme
firmations eff
unt are fina
he prior agree
are cleared
s periodically
f its status be
KCC also mo
periodically.
udes scenari
HKCC ument ments
age 46
ctical
rictly
ey.
ments
Banks.
HKMA.
direct
Kong
HKCC
by its
Each
rating
ational
dules.
which
ediate
fected
al and
ement
d and
y, with
eing a
onitors
The
ios for
Dece
Prin
An
inst
asso
As de
Phys
ember 2014
nciple 10:
FMI should
truments or
ociated with
erivatives co
ical Deliverie
Physical De
d clearly sta
r commodi
h such phys
ontracts clea
es is not app
eliveries
ate its oblig
ties and s
sical deliver
red and sett
licable.
gations wit
hould iden
ries.
tled by HKC
Prin
h respect t
tify, monito
CC are not p
PFMI Disclciple 10: Ph
to the deliv
or, and ma
hysically set
Hlosure Docuhysical Deliv
Pa
very of phys
anage the r
ttled, Princip
HKCC ument veries
age 47
sical
risks
ple 10:
Dece
Prin
A C
sec
and
dem
As HK
ember 2014
nciple 11:
CSD should
urities issue
d transfer o
materialised
KCC is not a
Central Sec
have appro
es and mini
of securities
form for the
a CSD, Princ
curities Dep
opriate rules
imise and m
s. A CSD s
eir transfer
iple 11: Cent
Princ
positories
s and proce
manage the
should main
by book ent
tral Securitie
ciple 11: Cen
edures to h
risks assoc
ntain securi
try.
es Depositori
PFMI Disclntral Securit
help ensure
ciated with t
ities in an
es is not app
Hlosure Docuties Deposit
Pa
the integrit
the safekee
immobilise
plicable.
HKCC ument tories
age 48
ty of
ping
d or
Dece
Prin
If an
exa
by c
othe
12.1
12.2
12.3
27 Tra
pr
ember 2014
nciple 12:
n FMI settle
mple, secur
conditioning
er.
HKCC se
the settle
settlemen
settling of
expiries in
For the fin
CMU27 to
simultane
mechanis
Upon the
correspon
of respec
currency
money o
settlemen
RMB/USD
CCMS Co
settlemen
on the fin
have bee
ransactions serotected by the
Exchange-o
es transactio
rities or fore
g the final s
ettles EFN fut
ment of two
nt mechanis
f Market Con
n the HKCC
nal settlemen
o exchange E
eously on a
sm is referred
e expiry of
nding money
ctive HKCC
leg constitut
bligations by
nt day. HKC
D arising from
ollateral Acc
nt day. HKC
nal settlemen
en settled.
ettled throughe CSSO.
Pr
of-value Set
ons that inv
eign exchan
settlement o
tures contrac
linked obliga
ms of two l
ntracts, and t
Rules and H
nt of EFN fut
EFN and mon
transaction
d to as Mode
RMB curren
y obligations,
Participants.
tes linked ob
y making go
CC only allo
m the final se
counts by giv
CC then effe
nt day, if and
CMU are fin
rinciple 12:
ttlement Sys
volve the se
nge transact
of one oblig
cts and RMB
ations upon t
linked obliga
the delivery a
HKCC Proced
ures contrac
ney obligatio
-by-transacti
el 1 in the PF
ncy futures
, in both RM
. Delivery i
bligations. T
ood paymen
ows the HKC
ettlement of
ving instructio
cts payment
d only if the
nal and irrevo
Exchange-o
stems
ettlement of
tions), it sho
gation upon
B currency fut
the final sett
ations, inclu
and paymen
dures.
cts, HKCC us
ons between
ion (gross)
FMI.
contracts, H
B and USD,
n a currency
The HKCC P
ts to HKCC
CC Participan
RMB curren
ons to HKCC
ts to the HKC
money oblig
ocable and the
PFMI Disclof-value Set
two linked
ould elimina
the final se
tures contrac
lement. HK
ding the tim
t obligations
ses the real-t
concerned H
basis. This
HKCC debits
to CCMS C
y leg and pa
Participants h
before 9:15
nts to withdr
ncy futures co
C before 11:0
CC Participan
ations in ano
e respective s
Hlosure Docuttlement Sys
Pa
obligations
ate principal
ettlement of
cts, which inv
KCC describe
ming of final
s, arising from
time DVP fac
HKCC Partic
s DVP settle
s and credit
Collateral Acc
ayment in an
have to settle
5 am on the
raw the amo
ontracts from
00 am on th
nts after 11:0
other curren
settlement fin
HKCC ument stems
age 49
s (for
risk
f the
volves
es the
ity for
m their
cility of
ipants
ement
ts the
counts
nother
e their
e final
ount in
m their
e final
00 am
cy leg
ality is
Dece
Prin
An
part
FMI
mee
Even
13.1
13.2
28 HK
AcClbe
ember 2014
nciple 13:
FMI should
ticipant defa
can take ti
et its obligat
nt of Default
The HKC
event of d
Default in
(a) an H
(b) an H
and
(c) insol
If an HKC
HKCC Pa
take certa
(a) susp
defa
(b) close
the o
(c) realis
(d) apply
HKC
KCC Rules 4ccount of the dlient Collaterale used to set o
Participant-
d have effec
ault. These
imely action
tions.
CC Rules def
default (Even
ncludes, amo
HKCC Partici
HKCC Partici
lvency proce
CC Participa
articipant as
ain remedial
pend the d
ulting HKCC
e out, settle,
open contrac
se any non-c
y any amou
CC, subject to
15 and 416 sdefaulting HKCl Accounts, buoff liabilities of
Prin
-default Rul
ctive and cle
rules and p
n to contain
fine the defa
nt of Defaul
ong other thin
pant’s failure
pant’s failure
eedings invol
nt commits a
a defaulter
actions, incl
efaulting HK
C Participant’s
, sell, transfe
cts of the defa
cash collater
nts of the de
o certain prov
stipulate that CC Participanut the amount f House Collat
nciple 13: Pa
es and Proc
early define
procedures s
n losses an
ault events a
lt) occurs. A
ngs:
e to meet any
e to comply w
ving an HKC
an Event of
under HKCC
uding:
KCC Partic
s access to H
er (together
faulting HKC
ral of the defa
efaulting HK
visions in rel
any amount t may be applstanding to th
teral Account.
articipant-de
cedures
ed rules and
should be d
nd liquidity
nd the action
As set out in
y payment o
with any pos
CC Participan
Default, HKC
C Rule 510 a
ipant’s part
HKCC’s facil
with the ass
C Participan
aulting HKCC
KCC Participa
lation to clien
standing to thlied by HKCC he credit of any
PFMI Disclefault Rules
d procedure
designed to
pressures a
ns that can b
n HKCC Rule
bligations du
sition limits im
nt.
CC may decl
and, in its ab
icipantship
lities;
sociated colla
t;
C Participant
ant to meet t
nt asset prote
he credit of thto set off liabily Client Collat
Hlosure Docus and Proced
Pa
es to mana
ensure tha
and continu
be taken wh
e 509, an Ev
ue to HKCC;
mposed by H
lare the defa
bsolute discr
and prohib
ateral) and h
t; and
the liability d
ection28.
he House Coilities in respecteral Account
HKCC ument dures
age 50
ge a
t the
ue to
hen an
vent of
HKCC;
aulting
retion,
it the
hedge
due to
llateral ct of its cannot
Dece
Defau
13.3
13.4
Total
13.5
13.6
29 Cu30 Cu
ember 2014
ult Procedu
HKCC ha
closing-o
The deta
appointed
together
regularly
HKCC h
responsib
procedure
such as t
reviewed
l Available R
In the pro
HKCC wo
event tha
RF; and
facilities
Principle
Under HK
(a) RF c
defa
(b) RF a
(c) the p
(d) the r
(e) the F
(f) the p
(g) the V
urrently there is
urrently there a
res
as appointed
ut, sale and
ailed proced
d, and are re
with any m
to ensure all
has also es
bilities of th
es also spec
the HKEx Bo
and tested w
Resources a
ocess of clo
ould have ac
at was insuffi
(c) various
made availa
7: Liquidity R
KCC Rule 70
contributions
ulting HKCC
accumulated
proceeds of a
resources of
Fixed Contrib
proceeds of a
Variable Con
s no insurance
are no guarant
Prin
selected HK
hedging of
ures were a
ehearsed on
aterial chan
l relevant info
stablished i
e key stake
ify the comm
oard, HKCC
with the relev
and Default
osing out the
cess to: (a) M
icient; (b) the
liquid resou
able by HKE
Risk for furth
06, the order
s (including
C Participant;
interest inco
any insuranc
HKCC contr
butions made
any guarante
ntributions of
e arrangemen
tees or facilitie
nciple 13: Pa
KCC Particip
the open co
agreed with
an annual b
nges in the
ormation is u
nternal proc
eholders in
munication pr
Board, RMC
vant stakeho
Waterfall
e open posi
Margin and o
e waterfall o
rces mainta
Ex to HKCC
er informatio
of applicatio
Fixed Contr
ome;
ce policies ar
ributed to the
e by all non-d
ees or facilitie
all non-defa
nt.
es arrangeme
articipant-de
pants as auth
ontracts of a
all authoris
asis. HKCC
procedures,
up-to-date.
cedures wh
handling a
rocedures wi
C, SFC and m
lders regular
tions of the
other collater
of resources
ined by HKE
C. Please r
on.
on of the RF
ribution and
rranged29;
e RF;
defaulting HK
es arranged3
aulting HKCC
nts.
PFMI Disclefault Rules
horised broke
defaulting H
sed brokers
C validates th
with the a
hich set ou
n Event of
th internal an
market partic
rly and on an
defaulting H
al from the d
described be
Ex including
efer to the
is as follows
Variable Co
KCC Particip
30; and
C Participants
Hlosure Docus and Proced
Pa
ers to facilita
HKCC Partic
when they
he contact d
authorised br
ut the roles
Default. T
nd external p
cipants. The
n as needed
HKCC Partic
defaulter and
elow includin
g committed
description
:
ontribution) o
pants;
s.
HKCC ument dures
age 51
ate the
cipant.
were
etails,
rokers
s and
These
parties
ey are
basis.
cipant,
in the
ng the
credit
under
of the
Dece
13.7
Alloc
13.8
ember 2014
In the ev
HKCC’s o
the desc
uncovere
cation of De
In the ev
contributi
applied to
respective
HKCC Pa
such app
specified
non-defau
the time p
for further
vent of an H
obligations, H
cription unde
ed default los
fault Losses
vent of an HK
ons to the
o share the d
e contributio
articipants to
plication with
by HKCC
ulting HKCC
period specif
r information
Prin
HKCC Partic
HKCC may a
er Principle
ss.
s and Reple
KCC Particip
RF are used
default loss o
ons to the RF
o replenish t
hin three bu
. Similarly
Participants
fied. Please
n.
nciple 13: Pa
ipant defaul
apply funding
4: Credit R
enishment/R
pant default
d to cover a
on a pro-rata
F immediate
the deficienc
usiness days
y, if the fu
s are required
e refer to the
articipant-de
t and that th
g available u
Risk for furth
Repayment A
where non-
a default los
a basis by re
ly prior to th
cy of their R
s or such o
unding ava
d to repay HK
e description
PFMI Disclefault Rules
he RF is ins
under the CA
her informat
Arrangemen
defaulting H
ss, such con
ference to H
he default. H
F Contributio
other time p
ilable under
KCC on a pro
under Princ
Hlosure Docus and Proced
Pa
sufficient to
AC (please re
tion) toward
nts
HKCC Partici
ntributions w
HKCC Partici
HKCC will re
ons as a res
period as m
r CAC is
ro-rata basis
ciple 4: Cred
HKCC ument dures
age 52
cover
efer to
s any
pants’
will be
pants’
equire
sult of
ay be
used,
within
it Risk
Dece
Prin
A C
pos
resp
14.1
14.2
Acco
14.3
14.4
31 Th
byof Ac
ember 2014
nciple 14:
CP should h
sitions of a
pect to thos
The SFO
safeguard
HKCC Pa
routine m
HKCC re
positions
Accounts
descriptio
HKCC op
Contracts
registered
to open
recording
positions
recipient
(please r
relationsh
ount Structu
HKCC of
Participan
Participan
Accounts
arising fro
Market M
Omnibus
Individua
same clie
The SFO
trade and
here is anothey an HKCC Paf the same beccount.
Segregation
have rules a
participant
se positions
O lays out var
ding of client
articipants.
market interm
equires HKC
and collate
s and CCMS
ons under pa
perates a pri
s with HKCC
d in their Cle
various Cle
g of their cl
and collate
HKCC Parti
refer to the d
hip with any c
ure
ffers differen
nts and the
nt to record i
s to record its
om market m
Maker Accoun
Client Acco
l Client Acco
ent are eligib
O requires HK
d whether it w
er net marginearticipant to reeneficial owne
n and Porta
and procedu
t’s custome
.
rious require
t positions a
Compliance
ediaries’ sup
CC Participa
ral from the
S Collateral
aragraphs 14
incipal-based
C Participant
earing Accou
aring Accou
ients’ positio
eral to anoth
icipant and t
description u
client of HKC
nt types of C
eir clients.
its house po
s clients’ pos
making activi
nt are margin
ount are ma
ounts31 are m
le to be main
KCC Particip
was executed
ed client accouecord positionser whose pos
P
ability
ures that en
ers and the
ements for re
and collateral
e with these
pervision pro
ants to prop
eir own by m
Accounts o
4.3 and 14.5
d clearing m
ts as princip
nts. HKCC
unts and CC
ons and ass
her HKCC P
their complia
under parag
CC Participan
Clearing Ac
HKCC prov
sitions, Omn
sitions, and M
ties. Positio
ned on a net
argined on a
margined on
ntained in an
pants to iden
d as principa
unt called Clies which are ofsitions would
Principle 14:
nable the seg
e collateral
ecording clien
l by all licens
requiremen
ogram condu
erly identify
making use
offered by H
for more det
model. As th
pal in respec
C provides HK
CMS Collate
sociated col
Participant s
ance with re
raph 14.4),
nts.
counts to re
vides a Hou
nibus Client A
Market Make
ons maintain
t basis. Cli
a gross bas
a net basis.
n Individual C
ntify each tra
al or agent a
ent Offset Claf an offset natuotherwise be
PFMI Discl Segregatio
gregation an
provided to
nt trades and
sed corporat
ts is assess
cted by the S
and segreg
of different
HKCC. Ple
ails.
he CCP, HKC
ct of each de
KCC Particip
eral Accounts
llateral, and
subject to th
elevant provi
but has no
ecord the po
use Accoun
Accounts an
er Accounts t
ned in the Ho
ent positions
sis while tho
Only positi
Client Accoun
ade as being
nd this inform
im Account. Ture (e.g. a cal recorded in
Hlosure Docuon and Porta
Pa
nd portabili
o the CCP
d segregatin
tions includin
sed as part
SFC. In ad
gate their c
types of Cle
ease refer t
CC settles M
erivatives co
pants with fac
ts to facilitat
porting of
he consent o
isions of the
direct contr
ositions of H
t to each H
nd Individual
to record pos
ouse Accoun
s maintained
ose maintain
ions owned
nt.
g a house or
mation is rec
This account ilendar spreadan Omnibus
HKCC ument ability
age 53
ty of
with
ng and
ng the
of the
dition,
clients’
earing
to the
Market
ontract
cilities
te the
these
of the
e SFO
actual
HKCC
HKCC
Client
sitions
nt and
d in an
ned in
by the
client
corded
s used d trade)
Client
Dece
14.5
14.6
14.7
Porta
14.8
32 W
ember 2014
in contra
Participan
As menti
different t
Collatera
them to s
and them
own colla
arising fro
Account o
Collatera
all clients
all client
Client Acc
with the H
collateral
conducte
positions
Maker C
Participan
Collatera
of client p
the credit
applied b
amount s
liabilities
Details of
their pos
which is p
ability Arran
HKCC off
if necessa
the recipi
powers u
defaulting
HKCC Pa
consent f
While there is
act notes p
nt’s records.
oned in Prin
types of CCM
l Account an
separately id
mselves. Th
ateral and c
om positions
of the HKCC
l Account is f
s of an HKCC
accounts of
counts) to th
HKCC Partic
and collate
d by an HKC
in the Marke
ollateral Acc
nt.
l in client acc
positions only
t of the Hou
by HKCC to s
standing to th
of House Co
f the accoun
itions and c
publicly avail
ngements
fers facilities
ary, the asso
ent HKCC P
under its def
g HKCC Part
articipant to
from the recip
no specific r
rovided to
nciple 5, HK
MS Collatera
nd Market Ma
entify and ha
e House Co
collateral mo
s of an HKCC
Participant a
for recording
C Participant
an HKCC P
is Client Col
cipant. The
ral moveme
CC Participan
et Maker Acc
count of the
counts of an
y. HKCC R
se Collatera
set off liabilit
he credit of a
ollateral Acco
nt structure
collateral are
able on the H
to support H
ociated Marg
articipant.
fault procedu
ticipant, at th
gether with
pient HKCC
restriction on
P
the clients
KCC manage
al Account, i
aker Collate
andle collate
llateral Acco
ovement tra
C Participant
and settles n
g the collater
t. HKCC po
Participant (i.
lateral Accou
e Market Mak
ent transactio
nt or its client
count of an H
e HKCC Pa
HKCC Parti
Rules 415 and
al Account of
ties in respec
any Client Co
ount.
available for
e documente
HKEx websit
HKCC Partici
in to other H
In the event
ures to facili
he request of
the Margin
Participant a
transfer of p
Principle 14:
and mainta
es collateral
including Ho
ral Account
eral relating t
ount is for rec
ansactions.
t’s House Ac
net with the H
ral and collat
osts all obliga
e. Omnibus
unt of the HK
ker Collatera
ons arising f
t. HKCC po
HKCC Partic
rticipant and
cipant will be
d 416 stipula
f the default
ct of its Clien
ollateral Acc
r HKCC Par
ed in Chapte
te.
pants to tran
HKCC Particip
of an HKCC
tate the tran
f the clients,
in respect
and other con
positions for a
PFMI Discl Segregatio
ained as pa
via CCMS.
use Collater
to HKCC Pa
to their client
cording an H
HKCC pos
ccount to this
HKCC Partic
eral moveme
ations arising
Client Acco
KCC Participa
al Account is
from market
osts all obliga
cipant to the
d settles ne
e used for co
te that any a
ing HKCC P
nt Collateral
ount cannot
ticipants to
er I of the H
nsfer their clie
pants subjec
Participant d
nsfer of clien
to a nominat
of such pos
nditions32.
an Omnibus
Hlosure Docuon and Porta
Pa
art of the H
HKCC pro
ral Account,
articipants to
ts, market m
HKCC Partici
sts all oblig
s House Col
cipant. The
ent transactio
g from positio
ount and Indi
ant and settl
s for recordin
t making act
ations arising
applicable M
et with the H
overing oblig
amount stand
Participant m
Accounts, b
be used to s
use for man
HKCC Proce
ents’ position
ct to the cons
default, HKC
nt positions
ted non-defa
sitions, subj
Client Accoun
HKCC ument ability
age 54
HKCC
ovides
Client
allow
makers
pant’s
ations
lateral
Client
ons of
ons of
vidual
es net
ng the
tivities
g from
Market
HKCC
ations
ding to
may be
but the
set off
naging
edures
ns and,
sent of
CC has
of the
aulting
ect to
nt and
Dece
14.9
Indthe
ember 2014
HKCC ha
portability
opinions
dividual Cliene positions in
as also confir
y arrangeme
procured fro
t Account, anythat account p
rmed the lega
nts provided
m an indepe
y transfer in apursuant to Se
P
al soundnes
d by HKCC
endent law fir
a Client Offsetection 1.4.3 of
Principle 14:
s and enforc
under Hong
rm in Hong K
t Claim Accouf HKCC Proce
PFMI Discl Segregatio
ceability of th
Kong law b
Kong.
unt must be foedures.
Hlosure Docuon and Porta
Pa
e segregatio
based on the
or all, but not p
HKCC ument ability
age 55
on and
e legal
part, of
Dece
Prin
An
suff
so t
mat
reco
Ident
15.1
15.2
Finan
15.3
ember 2014
nciple 15:
FMI should
ficient liquid
that it can
terialise. Fu
overy or ord
tification of
HKCC us
material
identificat
an evalua
implemen
and mana
HKCC ha
including:
(a) the
jurisd
HKC
(b) mark
prod
com
(c) the e
(d) oper
(e) the
Princ
ncial Resou
In its ann
forecast t
scenarios
financial
and expe
HKCC, to
obligation
General Bu
d identify,
d net assets
continue o
urther, liquid
derly wind-d
Business R
ses the HKE
risks includi
tion of intern
ation of their
nts key finan
age the risks
as identified
:
pace and d
dictions and
CC;
ket condition
ucts, a dev
petitive adva
effectiveness
rational issue
investment
ciple 16: Cus
rces for Bus
nual budget
the operating
s. In additi
position thro
enses, cash
o ensure suf
ns.
siness Risk
monitor, an
s funded by
perations a
d net asset
down of criti
Risks
Ex Group’s
ng its gener
al and exter
impacts and
cial and inte
s.
external an
direction of
the impact
ns and the p
veloping ma
antage;
s of HKCC’s
es that may i
risk in its o
stody and Inv
siness Oper
planning, HK
g and capital
on, HKEx m
ough monthly
in and out flo
fficient liquid
k
nd manage
equity to co
and services
ts should a
ical operatio
ERM framew
ral business
nal factors th
d the likelihoo
ernal controls
d internal fa
legislative
this may ha
pace of dev
arket segme
business str
mpact HKCC
own assets.
vestment Ris
rations
KEx takes in
budget unde
monitors the
y reviews of
ows, both at
net assets
Principl
its genera
over potenti
s as a goin
at all times
ons and serv
work to iden
risk. The
hat could imp
od of occurre
s and plans t
actors that p
reform in H
ve on user-p
velopment o
ent in which
rategy;
C’s expenditu
Please re
sks.
nto account i
er normal, low
e impact of
profit and lo
t HKEx and
are maintain
PFMI Discle 15: Gener
al business
ial general b
ng concern
be sufficie
vices.
ntify, monitor
ERM framew
pair HKCC’s
ence. HKC
to mitigate, e
pose busines
Hong Kong
participation
f offshore R
h HKCC ex
ure and inves
efer to the
ts three-yea
w and high tr
general bus
oss, actual an
its subsidiar
ned to meet
Hlosure Docural Business
Pa
s risk and
business los
if those los
ent to ensu
r and mana
work require
s financial po
CC establishe
eliminate, mo
ss risks to H
and in ove
in the servic
RMB denom
xpects to ha
stments; and
description
ar strategic p
ransaction vo
siness risk
nd budget in
ry levels, inc
general bus
HKCC ument s Risk
age 56
hold
sses
sses
ure a
age all
es the
osition,
es and
onitor,
HKCC,
erseas
ces of
inated
ave a
d
under
plan to
olume
on its
ncome
luding
siness
Dece
15.4
15.5
15.6
15.7
33 Th
su
ember 2014
Furtherm
complianc
going con
amount s
following
being sho
projected
HKCC ha
required t
services u
default a
replenish
could inje
raise cap
would be
In the eve
were ava
of HKCC
defaulting
HKCC w
include c
Effective
market in
respective
Hong Kon
arrangem
he calculation ouch as HKCC’s
ore, as part
ce with the P
ncern, HKCC
sufficient to
six months,
ort-term loan
total operat
as determine
to achieve a
under stress
and applicat
ments of RF
ect capital int
pital via the c
subject to th
ent that HKC
ilable at the t
C. This wo
g HKCC Part
ill discuss it
onsideration
Resolution
nfrastructures
ely in Octobe
ng on new le
ments for fina
of the net currs contribution
t of its ongo
PFMI, and to
C maintains a
cover its p
and net cur
ns or loans t
ing expendit
ed that thes
a recovery or
ed market co
ion of the
F contributio
to HKCC if re
capital mark
he approvals
CC could no
time, HKEx w
ould involve,
ticipants.
s recovery a
of the new
Regimes fo
s” published
er 2014. Th
egislation tar
ncial instituti
rent assets exto the RF.
oing complia
o ensure it c
at all times n
rojected tota
rrent assets
that are rep
ure for at lea
e financial r
r orderly win
onditions if th
RF, HKCC
ons so as to
equired. HK
kets if neede
s of the HKEx
ot continue a
would be res
, among ot
and resolutio
recovery an
or Financial
d by the Fin
his will also t
rgeted for 20
ions includin
xcludes those
Principl
ance require
can continue
net current as
al operating
funded by e
ayable on d
ast the follow
resources ar
nd-down of H
his is necess
would sust
enable a re
KEx, as a list
ed. Any pla
x Board and
s a viable e
sponsible for
her things,
on plans fur
nd resolution
Institutions”
nancial Stab
take into con
015 to provid
g FMIs in Ho
being set asid
PFMI Discle 15: Gener
ements as a
operations
ssets33 fund
expenditure
quity or loan
emand) suff
wing 12 month
re sufficient
HKCC’s critic
ary. For ex
tain its oper
ecovery of o
ted company
n for raising
SFC.
ntity and no
ensuring a s
pursuing am
rther with the
standards,
” and “Reco
ility Board a
sideration th
de for recove
ong Kong.
de for risk man
Hlosure Docural Business
Pa
an RCH, inc
and services
ded by equity
e for at lea
ns from HKE
ficient to cov
hs.
to cover the
cal operation
xample, follow
rations and
operations.
y, could pote
g additional c
other altern
smooth wind
mounts due
e SFC. Th
“Key Attribu
overy of fin
and CPMI-IO
he work ongo
ery and reso
nagement pur
HKCC ument s Risk
age 57
luding
s as a
y in an
st the
Ex (not
ver its
e time
ns and
wing a
seek
HKEx
entially
capital
atives
down
from
his will
utes of
ancial
OSCO
oing in
olution
rposes,
Dece
Prin
An
loss
inst
16.1
Cust
16.2
16.3
Inves
16.4
ember 2014
nciple 16:
FMI should
s on and d
truments wit
HKCC ha
HKCC on
internal c
HKCC inv
ody of Asse
HKCC ho
and regu
above, in
(a) cash
(b) EFB
(c) US T
In openin
assessme
in those a
stment Strat
HKCC’s
approved
(a) Ris
min
con
(b) Pre
Inve
the
(c) Liq
liqu
Custody an
safeguard
delay in acc
th minimal c
as a compre
nly appoints c
controls that
vests its own
ets
olds its asset
lated low cr
bank and se
h assets with
N as collater
Treasuries as
ng the acco
ents to ensur
assets kept in
tegy
investment
d by the HKE
sk managem
nimise the ri
ntrols;
eservation o
estment Poli
preservation
uidity – inv
idity manage
nd Investme
its own and
cess to the
credit, mark
ehensive fram
custodians w
ensure opti
n assets unde
ts and HKCC
edit risk ent
ecurities acco
selected ba
ral with CMU
s collateral w
ounts with C
re the enforc
n the accoun
strategy foll
x Board as f
ment – inves
sks. All inv
of capital – s
cy. Investm
n of capital;
vestment por
ement is tigh
Princ
ent Risks
d its particip
ese assets.
ket, and liqu
mework to m
with accounti
mal protectio
er a conserv
C Participant
ities with a
ounts in the
anks in Hong
U; and
with Clearstre
CMU and C
ceability of th
nts.
ows the Inv
follows:
stments are
vestments a
safety of prin
ments are un
rtfolios have
htly controlled
ciple 16: Cu
pants’ asset
An FMI’s
uidity risks.
manage its c
ing practices
on of the as
ative investm
ts’ assets un
minimum cre
name of HK
Kong;
eam.
Clearstream,
e rights and
vestment Po
diversified
are subject t
ncipal is one
dertaken in a
e to be suffic
d on a daily b
PFMI Disclustody and I
ts and minim
investments
custody and
s, safekeepin
ssets being p
ment strategy
der its contro
edit rating of
CC. Curren
HKCC has
interests of H
olicy set out
and in high
to limits and
of the priorit
a manner tha
ciently liquid
basis; and
Hlosure DocuInvestment
Pa
mise the ris
s should b
investment
ng procedure
placed with
y described b
rol with supe
of A3 (Moody
ntly, HKCC h
s conducted
HKCC, partic
t by the IAC
h-quality ass
d appropriat
ty principles
at seeks to e
d at all time
HKCC ument Risks
age 58
sk of
be in
risks.
es and
them.
below.
rvised
y’s) or
holds:
legal
cularly
C and
ets to
te risk
of the
ensure
s and
Dece
16.5
16.6
34 Cu
su
ember 2014
(d) Ret
of th
HKEx ma
of HKEx
banks in
availabilit
principles
liquid and
pre-accou
assesses
supervisio
by the IAC
Investme
HKEx, wh
urrently, HKExubject to applic
turn – return
he HKEx Gro
anages cash
(HKEX Trea
Hong Kong.
ty subject to
s of the Inve
d minimise
unt opening d
s whether the
on, credit rat
C and appro
nt strategy is
hich is public
x holds over 9cable limits an
on investme
oup.
assets centr
asury). HKE
HKCC can
the banks’ c
stment Polic
risk while o
due diligence
e bank meets
tings of A3 (M
ved by the H
s disclosed to
cly available o
0% of the cas
nd concentratio
Princ
ents should b
rally at the H
Ex Treasury
n withdraw th
customary n
cy, with an a
ptimising ret
e in respect o
s the explicit
Moody’s) or a
HKEx Board.
o the public t
on the HKEx
sh assets in thon ratios.
ciple 16: Cu
be optimised
KEx Group le
places mos
hese deposit
otice periods
aim to prese
turn on inve
of a prospec
standards, w
above and o
through the p
x website.
he form of cash
PFMI Disclustody and I
at the appro
evel through
t cash asset
s promptly a
s. HKCC a
rve capital, r
estments. A
tive custodia
with selection
perational ef
periodic finan
h or deposits w
Hlosure DocuInvestment
Pa
oved risk tole
the treasury
ts as deposit
and with sam
pplies the pr
remain suffic
As part of H
an, HKEx Tre
n criteria bas
fficiency, end
ncial stateme
with selected
HKCC ument Risks
age 59
erance
y team
ts34 in
me-day
rimary
ciently
HKEx’s
easury
sed on
dorsed
ents of
banks,
Dece
Prin
An
exte
proc
sec
Bus
fulfi
disr
Oper
17.1
17.2
17.3
ember 2014
nciple 17:
FMI should
ernal, and m
cedures, an
urity and o
siness cont
ilment of th
ruption.
rational Risk
HKCC’s o
(a) ERM
ident
and
sour
and
(b) MCP
and
spec
a
d
m
a
When des
with HKC
Settlemen
extensive
premises
and extre
various st
Participan
HKCC m
centres
telecomm
minimise
Operationa
d identify th
mitigate the
nd controls
operational
inuity mana
he FMI’s ob
k Manageme
operational r
M framework
tify, assess,
operational p
rces, on an
treatment pla
P – HKCC ha
recovery pro
cific continge
llow rapid re
isruptive eve
minimise any
s a whole.
signing the M
CC Particip
nt Banks an
e range of d
, power outa
eme market
takeholders,
nts, third-par
maintains sec
in different
munication e
any impact
l Risk
he plausible
ir impact th
. Systems s
reliability
agement sh
bligations, i
ent Framew
isk managem
k – HKCC ap
monitor and
processes in
ongoing bas
ans to mitiga
as developed
ocedures foll
ency scenario
ecovery and
ents; and
damage cau
MCP, HKCC
ants, other
nd communic
disruptive ev
ages, system
movements.
including th
rty service pr
condary bac
t districts
exchanges fr
t to HKCC P
e sources o
hrough the
should be d
and should
hould aim fo
including in
work
ment framew
pplies HKEx
control/mitig
ncluding oper
sis. HKCC
ate, eliminate
d and mainta
lowing a disr
os. HKCC’s
d timely resu
used by disr
took into acc
FMIs and
cations netw
vent scenario
m failures (bo
It sets out
he HKEx Boa
roviders and
ckup sites fo
of Hong K
from HKCC’
Participants
Pr
of operation
use of app
designed to
d have ade
or timely re
n the event
work consists
Group’s ER
gate materia
rational risk f
establishes
e, monitor, or
ains a MCP, w
ruption to HK
s MCP aims
umption of c
ruptions to th
count interde
third-party
work supplie
os, such as
oth internal a
t escalation a
ard, RMC, HK
market parti
or business
Kong that
s primary p
and the ma
PFMI Disclrinciple 17:
nal risk, bo
ropriate sys
o ensure a
equate, sca
ecovery of
of a wide-
of the follow
M framework
l risks inhere
from both int
and implem
r manage the
which sets ou
KCC’s critica
to:
critical functio
he market an
ependencies
service pro
ers. The MC
loss of acc
and external)
and reporting
KCC Board,
cipants wher
operations
have diffe
production s
arket in cas
Hlosure DocuOperationa
Pa
oth internal
stems, polic
high degre
alable capa
operations
-scale or m
wing element
k to systema
ent in the bus
ternal and ex
ments key co
e risks; and
ut the contin
al functions,
ons followin
nd all stakeho
and externa
oviders, suc
CP address
cess to work
), natural dis
g procedure
regulators, H
re appropria
and system
rent power
sites, in ord
e of conting
HKCC ument l Risk
age 60
and
cies,
ee of
acity.
and
major
ts:
atically
siness
xternal
ontrols
gency
under
g any
olders
al links
ch as
es an
kplace
asters
s with
HKCC
te.
m data
r and
der to
gency.
Dece
Revie
17.4
17.5
17.6
Oper
17.7
17.8
17.9
ember 2014
Productio
backup s
DCASS/C
business
ew, Audit an
HKCC rev
annual M
critical bu
those bus
develops
procedure
in case o
agreemen
HKCC pe
changes
procedure
drills whe
Participan
operation
changes.
In addition
Governme
issues wi
and servic
rational Reli
The opera
its third-p
Quantitati
targets.
achieved
The syste
volumes a
The Infor
utilisation
The ITD p
considera
on data of D
site for bus
CCMS syste
operations w
nd Testing
views the M
MCP review
siness proce
siness proce
measures
es with other
of failure of
nts with them
erforms conti
to systems
es and contr
re appropria
nts, and co
al flows, co
n, HKCC par
ent which pr
th cross-ma
ce providers
ability Obje
ational reliab
arty service
ive objective
The primary
within two ho
em capacity
and a capaci
rmation Tech
on a daily ba
performs cap
ation to ensu
DCASS and
siness opera
ms in the se
would be res
MCP on an a
exercise, H
esses, interna
esses. HKC
to manage
r FMIs and th
f DCASS/CC
m.
ngency drills
s and/or se
rol measures
te. HKCC a
nducts mark
ntingency an
rticipates in t
rovides an o
rket implicat
when neede
ectives and C
bility objective
providers, H
es include s
y resilience
ours.
of DCASS/
ty buffer has
hnology Div
asis and con
pacity planni
ure that suffi
CCMS is re
ations in re
econdary da
sumed at the
annual basis
KCC condu
al and extern
CC assesses
e the disrup
hird-party ser
CMS or the
s on selectiv
ervices to a
s. HKCC P
also provide
ket rehearsa
nd fallback
the Market W
opportunity t
tions. HKC
ed.
Capacity Sc
es of HKCC
HKCC’s MCP
system ava
objective is
/CCMS is sc
s been put in
vision of HK
nducts a syst
ing taking th
cient system
Pr
eplicated to
eal-time. I
ata centre wo
secondary b
s or more fr
cts business
nal resources
s the impac
ptions. HK
rvice provide
ir systems.
ve scenarios
assure the
articipants a
s continuous
als with HK
plans before
Wide Rehears
o rehearse o
C also partic
calability
are defined i
P, and its inte
ilability and
to ensure
caled based
place to han
KEx (ITD) m
tem capacity
e peak volum
m capacity is
PFMI Disclrinciple 17:
the system
n case of
ould become
backup site w
requently as
s impact an
s and depend
ts in case o
CC agrees
ers, such as S
These are
regularly an
effectivenes
are invited to
s operational
KCC Particip
e the rollout
sal coordinat
our respons
cipates in dr
in the service
ernal policies
resilience
that system
on the proj
ndle potentia
easures the
review at lea
mes and bus
s in place to
Hlosure DocuOperationa
Pa
in the seco
contingency
e operationa
within two ho
required.
nalyses to id
dencies to su
of disruption
the contin
Settlement B
e included i
nd after sign
ss of opera
o participate
l training to H
pants to tes
t of major s
ted by the H
ses to high i
rills of other
e agreement
s and proced
and perform
recovery ca
jected trans
al stress volu
e system ca
ast semi-ann
siness growt
o meet the a
HKCC ument l Risk
age 61
ondary
y, the
al, and
ours.
In the
dentify
upport
s and
gency
Banks,
in the
ificant
ational
in the
HKCC
st the
ystem
KSAR
mpact
r FMIs
ts with
dures.
mance
an be
action
umes.
apacity
nually.
th into
agreed
Dece
Phys
17.10
ember 2014
business
and plann
changing
new syste
meet the
sical and Inf
0 HKCC fo
assess, a
physical s
attacks a
physical s
secondary
Departme
policy for
policy set
managem
service-leve
ning for the la
business en
em enhancem
business ser
formation Se
llows HKEx
and manage
security meas
and intrusion
sites (i.e. all
y backup s
ent, which is
r all applicat
ts out imple
ment and is d
el requiremen
aunch of new
nvironment.
ment or upgr
rvice level re
ecurity Polic
Group’s ph
e potential p
sures have b
ns, and to m
business o
sites). HKE
independent
tion systems
ementation s
esigned with
nts. The IT
w services or
HKEx will p
rade to ensu
equirements.
cies
hysical and
hysical and
been establis
minimise the
operations of
Ex’s Informa
t of ITD, ove
s within the
safeguards
h reference to
Pr
TD also cond
r unforeseeab
perform syst
ure the adequ
information
system vuln
shed to guard
e impact of
ffices and da
ation Secur
rsees the inf
HKEx Grou
in relation t
o internation
PFMI Disclrinciple 17:
ducts ad hoc
ble business
tem performa
uacy of the s
security poli
nerabilities a
d against una
potential na
ata centres,
rity and Bu
formation sec
up. The inf
to system c
al standards
Hlosure DocuOperationa
Pa
c capacity re
s growth due
ance tests fo
system capa
icies that id
and threats.
authorised a
atural disaste
both primar
siness Con
curity strateg
formation se
configurations
s.
HKCC ument l Risk
age 62
eviews
to the
or any
city to
entify,
The
access,
ers to
ry and
tinuity
gy and
ecurity
s and
Dece
Prin
An
part
Parti
18.1
18.2
18.3
18.4
18.5
ember 2014
nciple 18:
FMI shou
ticipation, w
cipation Re
HKCC ha
requireme
its service
Participan
Capital un
HKCC a
Participan
HKCC se
addition to
aspects o
its complia
The admi
the HKCC
must com
continue t
HKCC m
requireme
Procedure
breaches
monitors
regulatory
refer to th
process.
HKCC rev
result of th
the admis
approvals
Access and
ld have o
which permit
quirements
as establish
ents for two
es fairly and
nt; and (b) h
nder the FRR
pplies differ
nts based on
ets a higher R
o good finan
of the applica
ance and ris
ssion criteria
C Rules, whic
mply with the
to comply wit
monitors ong
ents, and ha
es for facilita
or no longe
HKCC Part
y reports sub
he description
views particip
he changing
ssion criteria
s of the HKCC
Pr
d Participati
bjective, ri
t fair and op
and Ongoin
hed a set
categories o
openly. A
ave a minim
R, or HK$5 m
rent financia
the services
RF Fixed Co
cial standing
ant including
k manageme
a applicable t
ch are public
HKCC Rules
th the criteria
oing compli
as defined a
ating the sus
er meets the
icipants’ ong
bmitted, such
n under Princ
pant admissi
market envi
and require
C Board and
rinciple 18: A
on Requirem
isk-based,
pen access.
ng Monitori
of objective
of HKCC Par
An HKCC Pa
mum Liquid C
million for CP
al requirem
s received fro
ontribution le
g, HKCC con
the experie
ent policies a
to each cate
cly available o
s and HKCC
a for admissi
iance of HK
and publicly
spension and
e participatio
going financ
h as the FRR
ciple 4: Cred
ion, access r
ironment and
ments as de
d SFC.
Access and
ments
and public
ng
e, risk-base
rticipants, na
articipant mu
Capital of the
P and HK$20
ments to dif
om, and the p
evel for a GC
nsiders key o
nce of its ke
and systems
egory of HKC
on the HKEx
Procedures
ion.
KCC Particip
y disclosed t
d orderly exi
on requireme
cial standing
R reports and
dit Risk for th
restrictions a
d regulatory
etailed in the
PFMI Discld Participatio
cly disclos
d and tran
amely CP an
st (a) be an
e higher of i
million for G
fferent cate
potential risk
CP as comp
operational a
y personnel
.
CC Participan
x website. H
in force from
pants with
the HKCC R
t of an HKC
ents. HKCC
g through pe
d annual rep
he counterpa
nd eligibility
requirements
HKCC Rule
Hlosure Docuon Requirem
Pa
sed criteria
nsparent elig
nd GCP, to a
n HKFE Exch
its required
GCP respecti
egories of H
ks posed to, H
pared to a CP
and internal c
and the qua
nt are stipula
HKCC Partic
m time to time
their partici
Rules and H
CC Participan
C, as a CCP
eriodic revie
ports, etc. P
arty risk mon
requirement
s. Any cha
es is subject
HKCC ument ments
age 63
for
gibility
access
hange
Liquid
vely.
HKCC
HKCC.
P. In
control
ality of
ated in
ipants
e, and
pation
HKCC
nt that
P, also
ews of
Please
itoring
ts as a
nge in
to the
Dece
Susp
18.6
ember 2014
pension and
As set ou
the partic
Participan
revoke th
circumsta
revocation
or obligat
purpose
revocation
restricted
practicabl
suspensio
d Revocation
t in the HKC
cipation requ
nt, including r
he participan
ances, such a
n of the parti
tions arising
of settlemen
n. Where a
or participa
le notify oth
on or revocat
Pr
n of HKCC P
C Rules, wh
uirements HK
restricting its
ntship of an
as upon the l
icipantship o
out of matte
nt of any c
an HKCC Pa
antship has
her HKCC P
tion.
rinciple 18: A
Participation
here an HKC
KCC may ta
s access to a
HKCC Part
iquidation or
of an HKCC
ers which oc
contracts he
articipant’s ri
been suspe
Participants,
Access and
n
C Participan
ake disciplina
nd/or using H
ticipant forth
r winding-up
Participant d
ccurred prior
eld by the H
ight to acces
nded or rev
the SFC, a
PFMI Discld Participatio
t breaches o
ary action ag
HKCC’s facil
hwith by not
of an HKCC
does not affe
to the revoc
HKCC Partic
ss HKCC’s f
voked, HKCC
and HKFE
Hlosure Docuon Requirem
Pa
or no longer
gainst that H
ities. HKCC
tice under c
C Participant.
ect any of its
cation and f
cipant befor
facilities has
C will as so
of the restr
HKCC ument ments
age 64
meets
HKCC
C may
certain
The
rights
for the
re the
been
on as
riction,
Dece
Prin
An
tiere
Third
19.1
19.2
Mana
19.3
19.4
ember 2014
nciple 19:
FMI should
ed participa
d-Party Clea
HKCC su
clearing s
participan
HKCC de
relationsh
GCP that
according
Principle
between
condition
the GCP
agreemen
any of its
aging Risk A
As license
under the
Capital le
monitor a
the regula
relevant r
applicable
the rules o
HKCC ma
of the risk
higher ad
Contributi
requires
measures
performs
settlemen
described
Tiered Part
identify, mo
ation arrange
aring Service
upports tiered
service. A G
nt of HKCC (i
eals with the
hip with the N
t clears for
g to the diffe
6: Margin.
a GCP and
that there is
and NCP.
nt with the N
NCP intends
Arising from
ed corporati
e SFO and f
evels for rev
nd supervise
atory oversig
risk monitori
e. In additio
of HKFE.
anages the r
k of the GCP
mission crite
ion to the RF
a GCP, in
s and proced
regular ris
nt capability o
d under Princ
icipation Ar
onitor, and m
ements.
e
d participatio
GCP can cle
.e. Non-clea
e GCP as p
NCPs. Trad
the NCP.
rent Clearing
Chapter III o
d an NCP.
in place a va
The GCP
CP. The G
s to terminate
m Tiered Par
ons under th
file with the
view and mo
e the financia
ght and risk
ng informati
on, NCPs be
isk arising fro
, who is prim
eria for GCP
F (please refe
conjunction
ures on its N
k scoring a
of the GCPs
ciple 4: Credi
Principle
rrangements
manage the
on arrangem
ear on behalf
aring participa
principal and
des of the N
Positions of
g Account ty
of the HKCC
A GCP can
alid, binding
is required
GCP shall als
e the clearin
rticipation A
he SFO, NC
SFC a mon
onitoring. T
al and operat
k manageme
ion on the N
eing Exchang
om an NCP
marily respon
Ps in terms o
er to the des
with HKFE
NCP’s positio
analysis to
based on th
it Risk.
e 19: Tiered
s
e material ris
ments throug
f of an Exch
ant (NCP)).
d not as ag
NCP will be
f an NCP a
ypes as desc
C Rules gove
n clear and
and effective
to inform H
so give prior
g agreement
Arrangement
CPs are requ
nthly financia
The SFC, ac
tional capabi
ent activities
NCPs, such
ge Participan
through activ
nsible for the
of minimum
scription unde
, to impose
ons where ap
assess the
e Counterpa
PFMI Discl Participatio
sks to the F
h the offerin
hange Partici
gent, and ha
registered in
are maintain
cribed in par
erns the clea
settle trade
e clearing ag
KCC after s
written notic
t between th
ts
uired to com
al return refle
cting as fron
lity of NCPs,
s, including
as a risky
nts are requir
ve monitoring
risk of that N
Liquid Capita
er Principle 4
additional
ppropriate.
financial,
arty Risk Ran
Hlosure Docuon Arrangem
Pa
FMI arising f
ng of a third
ipant who is
as no contr
n the name
ed and mar
ragraph 6.7
aring arrange
es of an NC
greement be
signing a cle
ce to HKCC
hem.
mply with the
ecting their
nt-line regula
, is responsib
sending to
broker list, w
red to compl
g and assess
NCP. HKCC
al level and
4: Credit Risk
risk manage
In addition, H
non-financia
nking Method
HKCC ument ments
age 65
from
d-party
not a
ractual
of the
rgined
under
ement
CP on
tween
earing
if it or
e FRR
Liquid
ator to
ble for
HKEx
where
y with
sment
C sets
Fixed
k) and
ement
HKCC
al and
dology
Dece
19.5
19.6
ember 2014
HKCC ha
systems t
DCASS o
the NCPs
require a
resources
HKCC ma
limited to
additional
HKCC ha
NCPs to
transfer N
to accept
will not be
as describ
s also put in
to identify, m
on a daily bas
s of a GCP.
a GCP to p
s in meeting
ay impose a
o, applying
l Margin from
as establishe
a new GCP
NCP’s positio
such transfe
e able to clea
bed in Princip
place neces
monitor and m
sis to list the
In addition
rovide furth
g their paym
dditional risk
a more stri
m the GCP, w
ed internal o
P during a G
ons of a GCP
er. NCPs o
ar their trade
ple 13: Partic
Principle
ssary proces
manage the
breakdowns
n, for HKCC
er informatio
ment obligatio
k manageme
ingent posit
when necess
operating pro
GCP default.
P together wi
of the default
es in HKCC a
cipant-defau
e 19: Tiered
sses to gene
risk of NCP
s of the positi
C’s risk asse
on of its N
ons. Based
ent measures
ion limit an
sary.
ocedures to
HKCC Ru
ith the collate
ting GCP, w
and the proc
lt Rules and
PFMI Discl Participatio
rate timely in
s. Reports
ons, Margin
essment purp
CPs, such
d on the as
s on a GCP,
d/or requirin
facilitate th
le 510(f) em
eral to a new
without appoin
cedures in ha
Procedures
Hlosure Docuon Arrangem
Pa
nformation fr
are generat
and VA of e
pose, HKCC
as their fin
ssessment re
, including b
ng and coll
he switching
mpowers HK
w GCP that a
nting a new
andling the d
will apply.
HKCC ument ments
age 66
om its
ted by
ach of
C may
ancial
esults,
but not
ecting
of its
CC to
agrees
GCP,
default
Dece
Prin
An
man
20.1
20.2
20.3
20.4
ember 2014
nciple 20:
FMI that es
nage link-re
Currently
EFBN as
HKCC ha
link-relate
with CMU
In establis
enforceab
accounts
custody a
manage t
and if the
the link a
HKCC’s p
CMU is th
procedure
HKMA.
operate th
CMU.
FMI Links
stablishes a
lated risks.
, HKCC has
collateral, o
as put in p
ed risks in th
U to define th
shing the link
bility of the ri
with CMU.
and operatio
hose risks a
re are chang
arrangements
policies and s
he issuer CS
es of CMU, a
HKCC is a r
he custody a
a link with
a central se
n behalf of H
place appro
his establishe
e rights, obli
k with CMU,
ghts and inte
Moreover, H
onal, and p
s needed.
ges to the op
s continue to
standards.
D for EFBN.
and the laws
recognised d
accounts with
one or mor
ecurities dep
HKCC Partici
opriate meas
ed CSD link
gations and
HKCC has c
erests of HK
HKCC asses
ut in place
HKCC revie
perational flo
o meet regu
All operati
s of Hong Ko
dealer appoin
h CMU in ac
re FMIs sho
ository (CSD
pants.
sures to id
with CMU.
liabilities of e
conducted leg
CC, particula
sed the relev
appropriate
ws the link a
ows or risk m
ulatory stand
ons of CMU
ong. CMU i
nted by the H
cordance wit
PFMI DisclPrincip
ould identif
D) link with C
entify, moni
HKCC sign
each party.
gal assessm
arly in those
vant risks, su
procedures
arrangements
management
dards and ar
are governe
s under the
HKMA and a
th the rules a
Hlosure Docuple 20: FMI
Pa
fy, monitor,
CMU, to safe
itor and ma
ned an agree
ments to ensu
assets kept
uch as legal,
s and contr
s when nece
policies to e
re consisten
ed by the rule
supervision
a CMU mem
and procedu
HKCC ument Links
age 67
and
e keep
anage
ement
ure the
in the
credit,
ols to
essary
ensure
nt with
es and
of the
ber to
ures of
Dece
Prin
An F
and
Desig
21.1
21.2
Obje
21.3
21.4
35 In
me
ember 2014
nciple 21:
FMI should
d the market
gn of the Op
HKCC pr
Participan
mechanis
efficiency
In determ
the local
derivative
practices.
industry g
proposals
settlemen
HKCC Pa
from the s
ctives
As an RC
SFO. In
practicabl
arrangem
associate
facilities in
SFC and
the condu
The SFC
objectives
with the R
HKEx’s p
with mark
Moreover
hotlines a
recent years, easures and in
Efficiency a
be efficient
ts it serves.
perational M
rovides effic
nts and the
sms to seek
and effectiv
mining its ope
market and
es market in H
HKCC co
groups and
s before they
nt arrangeme
articipants, H
stakeholders
CH, HKCC is
summary,
le, that the
ments for any
d with its bu
n accordanc
that it can a
uct of its busi
C supervises
s and other o
RMC and Cle
proposals, in
ket participa
r, HKCC Pa
and emails.
HKEx conduc
introduction of
and Effectiv
t and effecti
Model
cient and ef
derivatives
k input and
eness of its s
erational arra
environmen
Hong Kong; a
onducts soft
solicits the v
y are finalise
ent, operatin
HKCC also c
.
s given seve
the objective
re are orde
y transaction
usiness and o
e with its HK
t all times pr
ness.
s HKCC’s o
obligations of
earing Cons
itiatives and
ants and ind
articipants ca
cted public conf after-hours fu
Pr
veness
ve in meetin
ffective serv
market of
feedback fr
services, ope
angements, H
nt; (b) the n
and (c) the re
consultation
views of the
ed. For ma
ng structure,
conducts pub
eral specific
es of HKCC
erly, fair an
ns cleared o
operations a
KCC Rules a
rovide and m
ongoing com
f an RCH, in
sultative Pan
clearing bu
dustry group
an submit s
nsultations onutures trading.
rinciple 21: E
ng the requ
vices which
Hong Kong
rom relevant
erations and
HKCC takes
eeds of the
equirements
ns with rele
e Clearing C
ajor changes
and regime
blic consulta
statutory dut
C are to ens
nd expeditio
or settled th
are managed
and HKCC P
maintain facil
mpliance w
cluding with
el to discuss
usinesses.
ps to collec
suggestions
n the implemen.
PFMI DisclEfficiency a
irements of
serve the
g. HKCC
t stakeholde
arrangemen
into accoun
many overs
of internatio
vant market
onsultative P
s to the polic
that would
ations35 to se
ties and resp
sure, so far
ous clearing
hrough its fa
d prudently, t
rocedures as
ities to meet
ith the stat
PFMI. HKE
s their views
HKEx also p
ct their view
and feedba
ntation of risk m
Hlosure Docu
and Effective
Pa
f its particip
needs of H
has put in
ers to asses
nts.
nt (a) the nee
seas users
onal standard
t participant
Panel on HK
cies, clearin
affect HKCC
eek views d
ponsibilities
as is reaso
g and settle
acilities, that
that it opera
s approved b
t contingenci
tutory duties
Ex meets reg
s and feedba
periodically
ws and feed
ack to HKC
management
HKCC ument eness
age 68
pants
HKCC
place
ss the
eds of
of the
ds and
s and
KCC’s
g and
C and
irectly
in the
onably
ement
t risks
tes its
by the
ies for
s and
gularly
ack on
meets
dback.
CC via
reform
Dece
21.5
21.6
36 Th
coanHK
ember 2014
HKEx dev
strategies
operating
against th
Furthermo
effectiven
(a) achie
(b) prog
Com
prior
strat
evalu
to th
he Managemeompliance withnd regulationsKEx Board an
velops and a
s, and provid
plan. The
he plans at le
ore, HKEx
ness, includin
evements ar
ress of all
mmittee. Th
ritise, author
tegic busine
uates progre
e Manageme
ent Committeh all statutory s and do any d its sub-com
adopts a thre
es guidance
HKEx Board
east annually
has establ
ng:
re subject to
major initia
e committee
rise, monitor
ess objective
ess, identifies
ent Committe
ee is authoris
duties impossuch things tomittees.
Pr
ree-year stra
on business
d approves t
y.
ished mech
quarterly rev
atives is mo
e, consisting
r and contro
es and alig
s problems,
ee36 and HK
sed by the sed on the HKo discharge it
rinciple 21: E
ategic plan w
s priorities fo
the plans an
hanisms to
view by HKE
onitored by
g of senior
ol the initiat
gn them to
and where
KEx Board.
HKEx Board KEx Group unts powers and
PFMI DisclEfficiency a
which lays do
r the prepara
d assesses
evaluate it
x’s senior ma
the Project
business he
tives in orde
strategy.
appropriate
to oversee nder the relevad functions co
Hlosure Docu
and Effective
Pa
own the corp
ation of the a
the achieve
ts efficiency
anagement;
Portfolio R
eads, will id
er to achiev
It assesses
escalates m
the HKEx Gant legislation
onferred on it
HKCC ument eness
age 69
porate
annual
ments
y and
and
Review
entify,
ve the
s and
matters
Group’s n, rules by the
Dece
Prin
An
com
clea
22.1
22.2
22.3
ember 2014
nciple 22:
FMI should
mmunication
aring, settlem
HKCC us
exchangin
arrangem
via SWIF
Derivative
HKCC Pa
personal
Window-b
straight-th
widely us
Microsoft
HKCC ad
format, inc
(a) SWI
as th
(b) risk
form
(c) three
Communica
use, or at
n procedure
ment, and re
ses internat
ng message
ments. HKC
FT. HKCC
es Network (S
articipants ca
computers w
based so
hrough-proce
sed in globa
Windows an
opts internat
cluding:
FT standard
he payment,
parameter fi
at; and
e-byte ISO c
Princi
ation Proced
a minimum
es and sta
ecording.
ionally acce
es across sy
C communic
Participants
SDNet) using
an access D
with support
oftware; a
essing via A
al markets.
nd Internet Ex
tional comm
message ty
clearing and
les generate
urrency code
iple 22: Com
dures and S
m accommod
andards in
epted comm
ystems to fa
cates with its
s can acces
g TCP/IP pro
DCASS throu
ted configura
and/or (b
Application P
Any person
xplorer brow
unication sta
ypes comply
d settlement
ed for Margi
e is used to r
mmunication
Standards
date, releva
order to fa
munication p
acilitate effic
s Settlement
ss DCASS/C
otocol.
gh (a) termi
ation and in
b) host-to
Programme
nal compute
wser is able to
andards on r
ying with ISO
instruction st
n calculation
represent cu
PFMI Discln Procedure
nt internatio
acilitate effi
rocedures a
cient clearin
Banks, CMU
CCMS via th
nal connecti
nstalled with
o-host co
Interface (A
er with supp
o access all C
reference da
O 15022 stan
tandards;
n are in PC-
rrencies in D
Hlosure Docues and Stand
Pa
onally acce
icient paym
and protoco
ng and settle
U and Clears
he Securities
ion with ded
the standa
onnection
API). The A
ported versio
CCMS funct
ata and mess
ndard are ad
-SPAN comp
DCASS/CCM
HKCC ument dards
age 70
pted
ment,
ols for
ement
stream
s and
icated
rdised
with
API is
ons of
ions.
saging
dopted
patible
MS.
Dece
Prin
An F
suff
risk
rule
Rules
23.1
23.2
Discl
23.3
37 Th
ter
ember 2014
nciple 23:
FMI should
ficient inform
ks, fees, and
es and key p
s and Proce
The HKC
of clearin
rights and
other mat
and HKCC
concessio
in plain E
website.
publicly av
Any amen
the SFC.
and HKCC
which are
losure
HKCC op
and other
HKCC’s
available
(a) the
ame
(b) risk m
and
(c) clear
he Chinese verms in the Chi
Princ
Disclosure
have clear a
mation to e
d other mate
procedures s
edures
C Rules and
g and settle
d obligations
terial costs in
C Procedure
on where app
English, and
Chinese ve
vailable on th
ndment to th
HKCC not
C Procedure
e also publicly
perates trans
r interested
services an
on the HKEx
HKCC Ru
ndments;
managemen
sensitivity an
ring and sett
ersion expressinese version
iple 23: Disc
of Rules, Ke
and compre
nable partic
erial costs t
should be p
d HKCC Proc
ement, risk m
of HKCC an
ncurred by H
es, including
plicable, etc.
are availabl
ersion37 of t
he HKEx we
e HKCC Rul
tifies HKCC
s and the eff
y available o
parently, and
parties to id
nd facilities.
x website:
les and H
t arrangeme
nalysis result
lement arran
sly states that and in the En
closure of R
Key Procedu
ehensive rule
cipants to h
they incur b
publicly disc
cedures con
management
nd HKCC Pa
HKCC Partici
the rates, ca
The HKCC
le to HKCC
the HKCC
ebsite.
les and HKC
Participants
fective dates
on the HKEx
d provides s
dentify and
HKCC m
HKCC Proce
ents, includin
ts;
ngements du
in the event onglish version,
Rules, Key P
res, and Ma
es and proc
have an acc
by participat
closed.
tain the nece
t, default an
rticipants, et
ipants are al
alculation me
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