(17)With regard to the effective supervision and enforcement of the legal arrangements for transactions on non-centrally cleared derivative contracts in Hong Kong, the HKMA has primary responsibility for the monitoring and enforcement of compliance with the Policy Manual through its ongoing risk-based supervisory approach for AIs. The supervisory measures that the HKMA may take include requiring the AI concerned to submit a report under section 59(2) of the BO to identify the root causes of any deficiency in margining or risk mitigation practices for future rectification, and issuing directions under section 52 of the BO to an AI requiring it to strengthen its internal control systems. Moreover, adherence to the Policy Manual will be reflected in an AI’s CAMEL rating and/or supervisory review process assessment. Significant non-compliance with the Policy Manual may cause the HKMA to undertake a review of whether the AI remains in compliance with the authorisation criteria in the Seventh Schedule to the BO and whether its management remains fit and proper for its role. Further, though not commonly exercised, the HKMA has the power to revoke or suspend the authorisation of an AI. Those powers are provided for in sections 22(1), 24(1) and 25(1) of the BO. Those provisions should be considered to provide for the effective application of the relevant legal, regulatory and enforcement arrangements under the Policy Manual in an equitable and non-distortive manner and to ensure effective supervision and enforcement equivalent to the supervisory and enforcement arrangements available under the Union legal framework..