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

101O. Rule making power—trading obligation
(Not yet in operation)
(1) The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules—
(a) generally for the purposes of the trading obligation; and
(b) without limiting paragraph (a), to prescribe the particular matters set out in this section.
(2) Rules made under this section—
(a) may specify for the purposes of paragraph (c)(iv) of the definition of prescribed person in section 101A, a class or description of persons; and
(b) must provide in relation to a person of such a class or description that the person is subject to the trading obligation only if the person is a counterparty to a specified OTC derivative transaction.
(3) Rules made under this section—
(a) may specify generally, or with reference to a class or description of transactions, the OTC derivative transactions that are subject to the trading obligation; and
(b) without limiting paragraph (a), may provide that an OTC derivative transaction is subject to the trading obligation—
(i) even if a counterparty or more than one counterparty is a person outside Hong Kong;
(ii) except in relation to a person of a class or description specified under subsection (2), even if a prescribed person is not a counterparty to the transaction; or
(iii) even if the transaction is entered into or conducted wholly or partially outside Hong Kong.
(4) Without limiting subsection (3), OTC derivative transactions may be specified under that subsection with reference to any factor relating to an OTC derivative transaction, including—
(a) the underlying subject matter of the transaction;
(b) the features or characteristics of the transaction; and
(c) the persons involved in the transaction.
(5) Rules made under this section may specify—
(a) the circumstances relating to a specified OTC derivative transaction in which the trading obligation—
(i) applies;
(ii) does not apply; or
(iii) is taken to have been complied with;
(b) the criteria (including thresholds) for the application of the trading obligation; and
(c) different circumstances and criteria for different prescribed persons or different OTC derivative transactions.
(6) Rules made under this section may specify—
(a) the manner in which a specified OTC derivative transaction is to be executed on a designated trading platform;
(b) the circumstances in which a specified OTC derivative transaction that is executed otherwise than on a designated trading platform is treated, for the purposes of the trading obligation, as having been executed on a designated trading platform;
(c) that a prescribed person may execute a specified OTC derivative transaction on a designated trading platform directly or through a third party; and
(d) that a subsidiary specified under section 101D(5) that is a counterparty to a specified OTC derivative transaction may execute the transaction on a designated trading platform directly or through a third party.

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

101P. Rule making power—record keeping obligation
(1) The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules—
(a) generally for the purposes of the record keeping obligation; and
(b) without limiting paragraph (a), to prescribe the particular matters set out in this section.
(2) Rules made under this section—
(a) may specify for the purposes of paragraph (d)(iv) of the definition of prescribed person in section 101A, a class or description of persons; and
(b) must provide in relation to a person of such a class or description that the person is subject to the record keeping obligation only if the person is a counterparty to a specified OTC derivative transaction.
(3) Rules made under this section may specify—
(a) generally, or with reference to a class or description of transactions, the OTC derivative transactions that are subject to the record keeping obligation;
(b) the records to be kept;
(c) different records to be kept under different circumstances or by different classes or descriptions of prescribed persons;
(d) the manner in which, the location at which and the minimum duration for which the records must be kept;
(e) the circumstances relating to a specified OTC derivative transaction in which the record keeping obligation—
(i) applies;
(ii) does not apply; or
(iii) is taken to have been complied with; and
(f) any other matter relating to the records to be kept.

101Q. Rule making power—designations
The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules to prescribe—
(a) the application procedure for designation—
(i) as a central counterparty, including the documents and information to be provided by the applicant; or
#(ii) as a trading platform, including the documents and information to be provided by the applicant;
(b) other requirements to be complied with by an applicant for designation;
(c) any matter that may be taken into account when considering an application;
(d) the grounds on which designation may be refused or revoked;
+(e) the procedure for exercising a power under section 101J(1) or (5) or 101K(1) or (5); or
+(f) any other matter relating to the process of or procedure for a designation or revocation under section 101J or 101K.

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

101R. Persons who must notify positions in OTC derivative transactions
(Not yet in operation)
(1) This section applies to a person who—
(a) is not—
(i) an authorized financial institution;
(ii) an approved money broker;
(iii) a licensed corporation;
(iv) a recognized exchange company;
(v) a recognized clearing house; or
(vi) a person authorized under section 95(2) to provide automated trading services; and
(b) engages in OTC derivative transactions.
(2) A person to whom this section applies must notify the Commission in accordance with subsection (4) if the person’s position in a specific class reaches the notification level.
(3) For the purposes of subsection (2), a reference to a person’s position includes the position of another person to the extent to which the performance of the obligations arising from that other person’s position is guaranteed by the person.
(4) A notification must be given—
(a) in writing and within the period prescribed by the notification rules; and
(b) in accordance with subsection (5).
(5) A notification must contain—
(a) sufficient information—
(i) to identify the systemically important participant;
(ii) to identify the specific class to which the notification relates; and
(iii) to show that the notification level has been reached; and
(b) any information prescribed by the notification rules (including additional information so prescribed, relating to the matters referred to in paragraph (a)).
(6) A person who without reasonable excuse fails to comply with subsection (2) commits an offence.
(7) A person who commits an offence under subsection (6) is liable—
(a) on conviction on indictment to a fine of $5,000,000 and to imprisonment for 7 years and, if the offence is a continuing offence, to a further fine of $100,000 for every day during which the offence continues, until the cut-off date for the further fine; or
(b) on summary conviction to a fine of $500,000 and to imprisonment for 2 years and, if the offence is a continuing offence, to a further fine of $10,000 for every day during which the offence continues, until the cut-off date for the further fine.
(8) For the purposes of subsection (7), the cut-off date for a further fine for which the person is liable is the date on which the person, in writing, notifies the Commission in accordance with subsection (5) of the person’s position in that specific class.