Cap. 155 sub. leg. K

Banking (Charges Exempted from Section 119A(2)) Notice(L.N. 196 of 2016)(Cap. 155, section 106(2))(Enacting provision omitted—E.R. 4 of 2017) [1 July 2005] 1. (Omitted as spent—E.R. 4 of 2017) 1A. Interpretation In this Notice—assets (資產) has the meaning given by section 119A(1) of the Ordinance;charge (押記) has the meaning given by section 119A(1) of the Ordinance;OTC derivative transaction (場外衍生工具交易) has the meaning given by section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap. 571).(L.N. 196 of 2016) 2. Specification of exempted charges (1) Section 119A(2) of the Ordinance does not apply to the following classes of charges—(a) charges created in favour of Euroclear Bank S.A. (acting as operator of the Euroclear System);(b) charges created in favour of Clearstream Banking S.A.;(c) charges—(i) that are created in connection with the relevant authorized institution’s provision of initial margin for any OTC derivative transaction; and(ii) the aggregate current book value of which does not exceed 5% of the current book value of the institution’s total assets (excluding contra items).(2) For the purposes of subsection (1)(c)(i), initial margin is provided for an OTC derivative transaction if a party to the transaction provides collateral to the counterparty with a view to mitigating any potential future exposure of the counterparty that arises from a potential change in market value of the transaction following any default of the first-mentioned party.(L.N. 196 of 2016) 3. (Omitted as spent—E.R. 4 of 2017)