No. The current designation will automatically lapse once the SFO commences. Institutions would automatically be qualified as recognized counterparties if they satisfy any of the criteria set out in the SFO or the Rules, or are specified as such in the Rules.
Q1 : Does the recognized counterparty currently being designated by the Commission still maintain the status as a recognized counterparty after the commencement of the Securities and Futures Ordinance?
Q2 : Does recognized counterparty includes branches of a bank that meets the criteria of being a recognized counterparty?
Yes. So long as the bank is incorporated in a specified jurisdiction and regulated by a specified bank regulator, any branch of the bank is automatically qualified as a recognized counterparty.
Section reference: 3(c)
Q3 : How can an institution be specified as a recognized counterparty under section 3(e) of the Rules?
The institution can apply to the Commission to be specified as a recognized counterparty under section 3(e) of the Rules. Please note that the specification requires revising the subsidiary legislation and it will need to go through the negative vetting process by the Legislative Council. As such, one should allow some time for this specification process.
Section reference: 3(e)
Last update: 17 Mar 2003