Page:Clearing and Settlement Systems Ordinance (Cap. 584).pdf/8

PART 2
Designation and Oversight

Division 1—Designation

4. Monetary Authority may designate clearing and settlement systems

(1) The Monetary Authority may, by notice published in the Gazette, designate for the purposes of this Ordinance any clearing and settlement system described in subsection (2) if, in the opinion of the Monetary Authority, the system is or is likely to become a clearing and settlement system whose proper functioning is material to the monetary or financial stability of Hong Kong or to the functioning of Hong Kong as an international financial centre.

(2) A clearing and settlement system is a system referred to in subsection (1) if—

(a) it is in operation in Hong Kong; or

(b) it accepts for clearing or settlement transfer orders denominated in Hong Kong dollars,

and if it is not a system that is, or is operated by, a company recognized as a clearing house under section 37(1) of the Securities and Futures Ordinance (Cap. 571).

(3) For the purposes of subsection (1), a clearing and settlement system shall be regarded as a clearing and settlement system whose proper functioning is material to the monetary or financial stability of Hong Kong, or to the functioning of Hong Kong as an international financial centre, if the occurrence of any significant disruption to, or the presence of any significant inefficiency in, the functioning of the system is likely to result in the monetary or financial stability of Hong Kong, or the functioning of Hong Kong as an international financial centre, being adversely affected; and reference in that subsection to a clearing and settlement system that is likely to become a clearing and settlement system whose proper functioning is material to the monetary or financial stability of Hong Kong, or to the functioning of Hong Kong as an international financial centre, shall be construed accordingly.

(4) Without limiting the effect of subsection (1) or (3), the Monetary Authority may, for the purpose of determining whether a clearing and settlement system is or is likely to become a clearing and settlement system whose proper functioning is material to the monetary or financial stability of Hong Kong, or to the functioning of Hong Kong as an international financial centre, have regard to any one or more of the following factors as they then apply or appear likely to apply—