Clearing and Settlement of RMB Products

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Is 'Standing Intra Day Payment Instruction' service available?

CCASS Participants can select to set up a Standing Intra Day Payment Instruction through CCASS Terminals to receive refund of any excess cash prepayment and/or receive their CNS money obligations due from HKSCC before the generation of Intra Day Payment instructions by CHATS, which is at around 2:30 pm on each business day.

Is RDP/DVP on-hold applicable?

RDP/DVP on-hold is also applicable for RMB denominated transactions.

What is the settlement arrangement if the RMB bank account has yet to set up?

Where a Clearing Participant is in the process of opening a RMB bank account for CCASS money settlement purposes, HKSCC will make payment to the Clearing Participant by paper cheque or other means considered appropriate by HKSCC. For delivering Clearing Participants, payment will be made on the business day following the date of settlement. For receiving Clearing Participants, payment must be made directly into HKSCC’s designated RMB bank account before 5:45 pm on the date of settlement.

What kind of products will be settled in RMB?

Those Eligible Securities denominated in RMB which are accepted for clearing and settlement in CCASS from time to time will be announced via Participant Circulars issued by HKSCC.

Can CCASS Participants set up a 'Standing Intra Day Payment Instruction' in RMB?

CCASS Participants can select to set up a Standing Intra Day Payment Instruction through CCASS terminals to receive Corporate Actions related payment (CA payment) before the generation of Intra Day Payment instruction by CHATS, which is at around 2:30 pm on each business day. CCASS Participants which do not opt to receive intra-day CA payments will continue to receive such payments via DCI at day-end.

What's the arrangement if dividends are payable in RMB but CCASS Participants have not yet set up designated bank accounts for RMB?

CCASS Participants are advised to open RMB bank accounts to receive dividend payments in RMB. If a CCASS Participant has yet to set up a RMB bank account, the Participant will not be able to receive dividend payments via electronic means. Instead, HKSCC will issue a paper cheque in RMB to be collected by the Participant or such other means as considered appropriate by HKSCC upon receipt of Participant's written instruction. Bank charges will be borne by the Participant.

Is the current fee schedule also applicable to RMB items?

Similar to the money settlement arrangement for HKD and USD transactions, there will also be a money settlement fee for RMB denominated transactions. Other than that, the existing tariffs stated in Section 21 and 22 of the CCASS Operational Procedures still apply.

What's the money settlement fee for RMB items?

The money settlement fee for RMB items will be HK$0.5 for each DDI/DCI/EPI issued or each CPI settled by HKSCC and HK$12.80 for each Intra-day Payment Instruction issued by HKSCC.

Can CCASS Participants settle CCASS fees for RMB items in HKD?

Except dividend collection fees, which will be deducted from the entitlements, CCASS fees for RMB items will be settled in HKD at the exchange rate as determined by HKSCC from time to time.

Should HKSCC consider setting a new CCASS fee schedule applicable to RMB items based on the current CCASS fees charged in HKD?

Except the money settlement fee, which is subject to the fee charged by its RMB Agent Bank, HKSCC will use the existing fee schedule for RMB items and the charges will be in HKD for the time being. The arrangement is similar to the current fee set-up for USD items.

Do CCASS Participants need to make any changes to their back-office systems to facilitate the settlement of RMB denominated transactions?

CCASS is able to support multiple currencies including HKD, USD and RMB. There is no layout change to the current upload files, report text and report data. CCASS Participants should check with their IT departments or BOS vendors on the readiness of their BOS systems in order to support the settlement of RMB denominated transactions in addition to transactions in HKD and USD.

With the launch of RMB settlement operations, will there be changes to the layout of CCASS reports?

There is no CCASS report layout change due to the launch of RMB settlement operations. CCASS Participants can distinguish RMB denominated transactions based on the currency code (i.e. CNY) shown in reports.

Is it mandatory for CCASS Participants to set up a designated bank account for transactions in RMB?

It is not mandatory for CCASS Participants to set up a designated bank account for RMB transactions. However, they are advised to do so in case they need to handle RMB denominated transactions for their clients.

Why do CCASS Participants need to set up a designated bank account for RMB and what are the advantages? Will there be any issues if a CCASS Participant does not set up a designated bank account at this moment?

CCASS Participants are required to set up a designated bank account for RMB if they are going to process CCASS transactions denominated in RMB electronically (e.g. receiving dividend payments in RMB if offered by issuers). Otherwise, HKSCC can only arrange for money settlement of RMB denominated transactions via cheque payment or such other means as considered appropriate by HKSCC. Therefore, Participants are strongly advised to set up the RMB bank accounts as soon as possible to avoid delay in providing RMB services to their clients.

A Participant can choose to set up a designated bank account for RMB later when it needs to process CCASS money transactions denominated in RMB. However, Participants should note that lead time is involved in setting up a designated bank account for RMB. They will not be able to handle money settlement of RMB denominated transactions electronically if they do not have a designated bank account for RMB. Therefore, CCASS Participants are strongly advised to set up a designated bank account for RMB as soon as possible to avoid delay in providing RMB services to their clients.

Are there any charges for setting up the designated bank account for RMB? How long does it take?

HKSCC does not charge any fees for setting up CCASS money settlement service in RMB. However, CCASS Participants have to contact their Designated Banks to find out the costs, time and procedures required to set up a RMB bank account. CCASS Participants are also required to submit a “Renminbi Direct Debit Authorisation Form” to HKSCC.

It normally takes about three weeks for HKSCC to complete the set-up process depending on when HKSCC receives confirmation from the Participant’s Designated Bank for RMB transactions and HKSCC’s RMB Agent Bank.

Where can CCASS Participants find the list of Designated Banks that provide RMB services?

(a)	For CCASS Participants other than Investor Participants, the bank list is available on HKEx website at: http://www.hkex.com.hk/eng/market/clr/secclr/clrarng_hkscc/ClrArrangeHKSCCPart.htm

(b)	For Investor Participants, the bank list is attached to the ''Renminbi Direct Debit Authorisation Form'', which is available on HKEx website at http://www.hkex.com.hk/eng/prod/clr/sec_clrsett/ipacctsvc/formsdownload.htm or through the Forms Download in the CCASS Internet System

Which form should CCASS Participants submit to HKSCC to set up the account and from where can CCASS Participants download the form?

(a)	CCASS Participants other than Investor Participants are required to submit two forms for RMB money settlement service in CCASS: (1) ''Non-Investor Participant Setting Up of Renminbi Designated Bank Account Form'' and (2) ''Non-Investor Participant Renminbi Debit Authorisations and Authorisation to Disclose Information Form'' (DDA). These forms are available at: http://www.hkex.com.hk/eng/market/clr/secclr/forms_hkscc/Formshksccpart.htm.

(a)

CCASS Participants other than Investor Participants are required to submit two forms for RMB money settlement service in CCASS: (1) ''Non-Investor Participant Setting Up of Renminbi Designated Bank Account Form'' and (2) ''Non-Investor Participant Renminbi Debit Authorisations and Authorisation to Disclose Information Form'' (DDA). These forms are available at: http://www.hkex.com.hk/eng/market/clr/secclr/forms_hkscc/Formshksccpart.htm.

(b)	Investor Participants have to submit: (1) ''Investor Participant Setting Up of Renminbi Designated Bank Account Form'' and (2) ''Investor Participant Renminbi Debit Authorisations and Authorisation to Disclose Information Form'' (DDA). These forms are available at: http://www.hkex.com.hk/eng/prod/clr/sec_clrsett/ipacctsvc/formsdownload.htm and Forms Download in the CCASS Internet System. However, Individual Investor Participants should note that only Hong Kong residents can open RMB bank accounts in Hong Kong for the time being.

(b)

Investor Participants have to submit: (1) ''Investor Participant Setting Up of Renminbi Designated Bank Account Form'' and (2) ''Investor Participant Renminbi Debit Authorisations and Authorisation to Disclose Information Form'' (DDA). These forms are available at: http://www.hkex.com.hk/eng/prod/clr/sec_clrsett/ipacctsvc/formsdownload.htm and Forms Download in the CCASS Internet System. However, Individual Investor Participants should note that only Hong Kong residents can open RMB bank accounts in Hong Kong for the time being.

(a)

What are the CCASS admission criteria for Designated Banks for RMB?

Existing CCASS Designated Banks for HKD/USD should complete and return the ''Undertaking(s) for Renminbi'' together with a certified true copy of the board resolution authorising the execution of the Undertaking(s) and Questionnaire to HKSCC. In addition, a testing between HKICL and the Designated Bank is required if the Designated Bank selects to receive the RMB reports from HKICL in electronic file/tape form. HKICL issued a circular to its member banks on 12 August 2010 about the interface test arrangement. For details, please contact HKICL.

If a bank is not yet a CCASS Designated Bank, it should contact HKEx’s Cash Market – Participant Services (CM-PS) team and submit the prescribed application form. Banks which are interested in providing RMB money settlement service are also required to execute the Undertaking as mentioned in the above paragraph and do interface testing to receive the RMB reports from HKICL in electronic file/tape form. It may take four weeks to complete the application process. For details, please refer to Section 14.2.3 of the CCASS Operational Procedures or call CM-PS at 2840-3626.

How do Participants calculate the marks with CNS positions? to be settled in RMB? What’s the exchange rate?

Marks and concentration collateral obligations on RMB products to be cleared by HKSCC will be converted to a HKD equivalent calculated at the exchange rate as determined by HKSCC from time to time. Reference will be made to the available market information on the exchange rate. HKSCC reserves the right to collect the amount in RMB.

Will HKSCC accept RMB as cash collateral?

HKSCC will consider accepting RMB as cash collateral on a case by case basis.