Hong Kong Exchanges and Clearing Limited

Regulatory Framework and Rules

Rules and Guidelines

General Rules of CCASS

Updated: 1 July 2008

PART A: RULES OF GENERAL APPLICATION
Chapter 1. Interpretation
Rule
101 102 103 104	Definitions HKSCC to interpret HKSCC may disapply Rules HKSCC's policy on personal information collection
Chapter 2. Procedures
Rule
201 202 203	Operational Procedures binding on Participants Orders, directions, practice notes Terms and Conditions binding on Investor Participant
Chapter 3. Admission of Participants
Rule
301 302 303 304 305	Application for admission Categories of Participants Criteria for admission Approval of admission Transitional Provisions
Chapter 4. Transactions by Participants
Rule
401 402 403	Instructions by Participants Participants to act as principals Instructions in violation of laws etc.
Chapter 5. Eligible Securities & Eligible Currencies
Rule
501 502 503 504	HKSCC's discretion to determine eligibility Grounds for non-eligibility of Eligible Securities Acceptance/discontinuance of Eligible Securities Acceptance of Eligible Securities as Collateral Security
Chapter 6. Stock Accounts and CCMS Collateral Accounts
Rule
601 601A 602 603	Stock Clearing Accounts/Stock Segregated Accounts/Stock Lending Account/Stock Collateral Control Account/Stock Account of an Investor Participant CCMS Collateral Accounts Right to rectify errors Right to act in complaince with a court order etc.
Chapter 7. Services - General
Rule
701 702 703 704	Services Other clearing entities Arrangements with other entitiesOther clearing entities Access to CCASS
Chapter 8. Depository and Custodian Services
Rule
801 802 803 804 805 806 807 808 809 810 811 812 813 814 815 816 817 818 819 819A 820 821 822	Deposit of Eligible Securities Safe custody Eligible Securities deposited to be freely transferable Right not to accept Eligible Securities Representation and warranty of authority Representation untrue Registration or re-issue in name of HKSCC's nominee Immediate credit Fungibility Withdrawal of Eligible Securities from CCASS Limited withdrawal right of Stock Pledgee Participants Withdrawal of Certificates Withdrawal of New Certificates and Old Certificates Withdrawal of other Eligible Securities HKSCC's liability for defects HKSCC to pursue Appointed Depositary Custodian services in relation to Exchange Fund Notes Custodian services in relation to Specified Instruments Custodian services in relation to CMU Instruments Legal title to Exchange Fund Notes and interests in Specified Instruments and CMU Instruments Custodian services in relation to Foreign Securities Custodian services in relation to Structured Products issued in global form
Chapter 9. Clearing Services
Rule
901 902 903 904 905 906 907	Clearance of Exchange Trades Clearance of Clearing Agency Transactions HKSCC's discretion not to operate CNS System Clearance of other transactions: SIs Clearance of other transactions: ISIs Clearance of other transactions: TIs Clearance of other transactions: Cross-Border Transfer Instructions
Chapter 10. Settlement Services
Rule
1001 1002 1003 1004 1005 1006 1007	Book-entry settlement Transactions accepted for settlement Settlement by DIs or Batch-settlement-runs or on-line delivery Batch-settlement-runs: sequence of deliveries Unsettled SI transactions Unsettled ISI transactions Transfer Instructions
Chapter 11. Nominee Services
Rule
1101 1102 1103 1104 1105 1106 1107 1108 1109	Scope and extent of nominee and similar services HKSCC not to act for its own benefit Agents to provide nominee services Time limit for deposit of Eligible Securities Time limit for instructions etc. HKSCC may allocate rights among Participants Fractional entitlements HKSCC not liable Claims for surplus dividends etc.
Chapter 12. Money Settlement Services
Rule
1201 1202 1203 1204 1205 1205A 1206 1207 1208 1209	Participants to have Designated Bank Accounts Participants to authorise HKSCC Extent of HKSCC's authority Payments relating to Isolated Trades which are Exchange Trades Payments relating to SI and ISI transactions Payments relating to STI Transfer Payments relating to Isolated Trades which are Clearing Agency Transactions Set-off Sums payable on demand/default interest Extent of obligations of HKSCC
Chapter 13. Back-up Centre
Rule
1301	Scope of Back-up Centre
Chapter 14. Statement and Reports
Rule
1401 1402 1403 1404	Advices, statements, reports available Participants to check Advices, statements, reports to be conclusive Audited accounts of HKSCC
Chapter 15. Lists to be Maintained
Rule
1501 1502 1503	List of Eligible Securities Other lists Rules available for inspection
Chapter 16. Fees and Expenses
Rule
1601	Fees and expenses payable
Chapter 17. Continuing Obligations of Participants
Rule
1701 1702 1703	Further conditions Further assurances Other responsibilities
Chapter 18. Financial and Accounting Requirements
Rule
1801	Scope of requirements
Chapter 19. Indemnity
Rule
1901 1902	Scope of indemnity Participants liable for officers, employees etc.
Chapter 20. Disciplinary Actions
Rule
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013	Circumstances subject to disciplinary actions Participants responsible for officers, employees, etc. Disciplinary actions Expulsion of Participant Notices of disciplinary action and right to be heard Notice of hearing and right to be heard Procedures relating to any disciplinary proceedings Summary Disciplinary Action and Summary Suspension Appeals to the Disciplinary Committee and the Disciplinary Appeals Panel Grounds for appeal Order as to costs Commission, Exchange to be notified Rules 2001 to 2012 applicable to Participants other than Investor Participants
Chapter 21. Duties and Liabilities of HKSCC
Rule
2101 2102 2103 2104 2105	Duty to act in good faith Liability for anything not done in good faith Force majeure HKSCC not to be liable No investigation
Chapter 22. Termination of Participation
Rule
2201 2202 2203 2204 2205	Termination by notice by HKSCC Forthwith termination by HKSCC Termination by notice by Participants Consequences of termination HKSCC to notify Participants etc.
Chapter 23. Insolvency
Rule
2301	Insolvency of Participants
Chapter 24. Securities Losses
Rule
2401 2402 2403	Declaration of a Securities Loss Eligible Securities deemed to be lost or unavailable Allocation of a Securities Loss to Participants
Chapter 25. Guarantee Fund
Rule
2501 2502 2503 2504 2505 2506 2507 2508 2509 2510 2511 2512 2513 2514	Establishment of Guarantee Fund Contributions by Clearing Participants Form of Contributions Additional resources to Guarantee Fund Investment of assets of Guarantee Fund Application of Guarantee Fund Order of application of Contributions Replenishment of Contributions Opting out for Contributions exceeding limit Recovery of sums Information on assets and resources of Guarantee Fund Return of Contributions Dissolution of Guarantee Fund Application upon dissolution of Guarantee Fund
Chapter 26. Suspension of Services
Rule
2601 2602	HKSCC may suspend services Notification of suspension
Chapter 27. Insurance
Rule
2701	HKSCC shall maintain insurance
Chapter 28. Disclosure
Rule
2801 2802 2803 2804 2805	Disclosure required by law etc. Disclosure to Issuers or Depositaries of Eligible Securities Disclosure to others Disclosure to any organization with which HKEx, HKSCC or the Exchange has entered into an information sharing arrangement Disclosure to public
Chapter 29. Amendments
Rule
2901 2902	Amendments Notification of amendments
Chapter 30. Notices
Rule
3001 3002	Notice by HKSCC Notice by Participants
Chapter 31. Partial Invalidity
Rule
3101	Partial invalidity not to affect remainder
Chapter 32. Governing Law
Rule
3201	Hong Kong Law
Chapter 32A. Sub-Delegation of the Board's functions
Rule
3201A	Sub-Delegation
PART B: EXCHANGE TRADES AND TRANSACTIONS BETWEEN PARTICIPANTS
Chapter 33. Continuous Net Settlement System
Rule
3301 3302 3303 3304 3305 3306 3307 3308	Novation of Exchange Trades and Clearing Agency Transactions and replacement by Market Contracts Terms of Novation Daily netting Cross-day netting Allocation algorithm Daily netting of money sums upon delivery in CCASS HKSCC's obligations under Market Contracts Non-operation of CNS System
Chapter 34. Isolated Trades System
Rule
3401 3402 3403 3404 3405 3406 3407	Direct settlement in CCASS between Participants Possible measures by HKSCC in case of late delivery Possible measures by HKSCC in case of late payment Duty to report late delivery or payment Procedures for adjustments in respect of dividends etc. in case of late delivery Disputes in relation to settlement of Isolated Trades Rules 3401 to 3406 applicable to Participants other than Investor Participants
Chapter 35. Late Delivery of Securities - CNS System
Rule
3501 3502 3503	Default fee, stock borrowing and Buy-in Procedures for adjustments in respect of dividends etc. Compulsory stock borrowing by HKSCC in case of late delivery
Chapter 36. Risk Management Measures - CNS System
Rule
3601 3602 3603 3604 3605 3606 3607 3608	Marks Collateral Form of Marks and Collateral Securities-on-hold Evidence of securities available for settlement Money compensation Closing-out Charged Property
Chapter 37. Default Rules - CNS System
Rule
3701 3702 3703 3704	Events of Default Actions on default Declaration as Defaulter Certification of net sum due
Chapter 38. Settlement Agent
Rule
3801 3802	Application for Settlement Agents to be connected to CCASS Obligations of CCASS Participants in connection with Settlement Agents
Chapter 39. Access to CCASS from a Foreign Jurisdiction
Rule
3901 3902 3903 3904	Obligations of Participants or Settlement Agents located in a foreign jurisdiction Books and records Communication Legal liabilities
Chapter 40. Clearing by General Clearing Participants
Rule
4001 4002 4003 4004	Execution of Clearing Agreement Notification of execution of Clearing Agreement Obligations of GCP Termination of Clearing Agreement
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(Update No. 1 2007 of the General Rules of CCASS is now available for the subscribion. For those who wish to subscribe hardcopy updates to the General Rules of CCASS, please complete and return the attached copy of the Updating Service Request Form.)