Hong Kong Ordinances

CLEARING AND SETTLEMENT SYSTEMS ORDINANCE - SECT 7

Requirements applying to designated systems

(1) Every system operator and settlement institution of a designated system
shall ensure that the following requirements are complied with in relation to
the system, namely—

   (a)  that the operations of the system are conducted in a safe and
        efficient manner calculated to minimize the likelihood of any
        disruption to the functioning of the system;

   (b)  that there are in place operating rules that—

        (i)    comply with the requirements specified in subsection (2) and
               with any prescribed requirements relating to the operating
               rules of a designated system; and

        (ii)   provide for the system to be operated in accordance with this
               Ordinance as it applies in relation to that system;

   (c)  that there are in place adequate arrangements to monitor and enforce
        compliance with the operating rules of the system, including
        arrangements regarding the resources available to the system operator;

   (d)  that there are available to the system financial resources appropriate
        for the proper performance of the system’s particular functions.

(2) The operating rules of a designated system shall—

   (a)  impose on participants requirements that are no less stringent than
        the requirements imposed on participants under the other provisions of
        this Ordinance;

   (b)  provide that if a participant becomes insolvent he may be suspended
        from the system; and

   (c)  provide for default arrangements which are appropriate and adequate
        for the system in all circumstances.

(3) No change shall be made to the operating rules of a designated system
without the prior approval in writing of the Monetary Authority.