### Securities and Futures Ordinance 《證券及期貨條例》

101C. Clearing obligation
(1) A prescribed person must clear an OTC derivative transaction to which subsection (2) applies—
(a) with a designated CCP; and
(b) in accordance with the clearing rules.
(2) This subsection applies to an OTC derivative transaction that—
(a) is specified in the clearing rules—
(i) in relation to the prescribed person; and
(ii) as a transaction that is required to be cleared with a designated CCP;
(b) falls within the circumstances and the criteria specified in those rules—
(i) in relation to the prescribed person; and
(ii) for the application of the requirement to clear referred to in paragraph (a)(ii); and
(c) does not fall within the circumstances specified in those rules—
(i) in relation to the prescribed person; and
(ii) as circumstances in which the requirement to clear is taken to have been complied with.
(3) In addition, a prescribed person that is an authorized financial institution incorporated in Hong Kong must ensure that a subsidiary of that institution specified under subsection (5) complies in relation to an OTC derivative transaction with the requirement set out in subsection (4).
(4) The requirement is that the subsidiary clears with a designated CCP, in accordance with the clearing rules, an OTC derivative transaction—
(a) to which the subsidiary is a counterparty; and
(b) that is specified in those rules as a transaction to which subsection (3) applies.
(5) The Monetary Authority may, by a written notice given to an authorized financial institution incorporated in Hong Kong, specify for the purposes of subsection (3)—
(a) a particular subsidiary;
(b) more than one subsidiary; or
(c) subsidiaries generally.
(6) The Monetary Authority may specify under subsection (5) a subsidiary incorporated outside Hong Kong or a subsidiary incorporated in Hong Kong.
(7) Subject to an express agreement to the contrary by the parties to the transaction, a contravention of the clearing obligation in relation to an OTC derivative transaction does not of itself invalidate the transaction or affect any rights or obligations arising under, or relating to, the transaction.

### Securities and Futures Ordinance 《證券及期貨條例》

101D. Trading obligation

(Not yet in operation)

(1) A prescribed person must execute an OTC derivative transaction to which subsection (2) applies—
(a) only on a designated trading platform; and
(b) in accordance with the trading rules.
(2) This subsection applies to an OTC derivative transaction that—
(a) is specified in the trading rules—
(i) in relation to the prescribed person; and
(ii) as a transaction that is required to be executed only on a designated trading platform;
(b) falls within the circumstances and the criteria specified in those rules—
(i) in relation to the prescribed person; and
(ii) for the application of the requirement to execute as described in paragraph (a)(ii); and
(c) does not fall within the circumstances specified in those rules—
(i) in relation to the prescribed person; and
(ii) as circumstances in which the requirement to execute as described in subsection (1) is taken to have been complied with.
(3) In addition, a prescribed person that is an authorized financial institution incorporated in Hong Kong must ensure that a subsidiary of that institution specified under subsection (5) complies in relation to an OTC derivative transaction with the requirement set out in subsection (4).
(4) The requirement is that the subsidiary executes only on a designated trading platform and in accordance with the trading rules an OTC derivative transaction—
(a) to which the subsidiary is a counterparty; and
(b) that is specified in those rules as a transaction to which subsection (3) applies.
(5) The Monetary Authority may, by a written notice given to an authorized financial institution incorporated in Hong Kong, specify for the purposes of subsection (3)—
(a) a particular subsidiary;
(b) more than one subsidiary; or
(c) subsidiaries generally.
(6) The Monetary Authority may specify under subsection (5) a subsidiary incorporated outside Hong Kong or a subsidiary incorporated in Hong Kong.
(7) Subject to an express agreement to the contrary by the parties to the transaction, a contravention of the trading obligation in relation to an OTC derivative transaction does not of itself invalidate the transaction or affect any rights or obligations arising under, or relating to, the transaction.

### Securities and Futures Ordinance 《證券及期貨條例》

101J. Designation of central counterparties
(1) On application by a person in the prescribed manner and on payment of the prescribed fee, the Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary—
(a) designate the person, in accordance with the designation rules and by a written notice served on the person, as a central counterparty for the purposes of this Part; or
(b) refuse, in accordance with the designation rules, to designate the person.
(2) A person may be designated only if—
(a) at the time of designation, the person—
(i) is a recognized clearing house; or 
(ii) is a person authorized under section 95(2) to provide automated trading services; and
(b) the requirements prescribed by the designation rules have been met.
(3) A designation may be for—
(a) OTC derivative transactions generally; or
(b) a class or description of OTC derivative transactions specified in the designation.
(4) A person outside Hong Kong or in Hong Kong may be designated under this section.
(5) The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, in accordance with the designation rules and by a written notice served on a person, do the following with regard to a designation—
(a) impose conditions; 
(b) amend or revoke a condition;
(c) impose additional conditions;
(d) revoke the designation.
(6) Before exercising a power under subsection (1)(b) or (5)(d), the Commission must give the person concerned a reasonable opportunity of being heard.
(7) If the Commission amends or revokes a condition or imposes an additional condition under subsection (5)(b) or (c), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
(8) If the Commission revokes a designation under subsection (5)(d), the revocation takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
(9) If, under this section, a person is designated or a designation is revoked, the Commission must publish notice of that fact in the Gazette.
(10) A notice published under subsection (9) is not subsidiary legislation.