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Recital 16

Recital 16

(16)The SFC conducts ongoing monitoring of RCHs' compliance with risk management requirements through surveillance and risk-based examination procedures including testing of prudential requirements. The SFC has additional means to enforce compliance. In particular, the SFC has the power to direct RCHs to cease to provide or operate clearing or settlement facilities or to withdraw their authorisation. In addition, the SFC may also request RCHs to make certain amendments to their rules as deemed necessary, and is empowered to make such rule changes unilaterally where the RCH concerned does not comply with the request. The SFC has the power to request RCHs to provide books and records kept by them in connection with or for the purposes of their business or in respect of any clearing and settlement arrangements for any transactions in securities or futures contracts as well as other information relating to their business or any clearing and settlement arrangements for any transactions in securities or futures contracts that the SFC may reasonably require for the performance of its functions. Failure to provide that information or documentation, without reasonable justification, may result in the imposition of fines.

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