F. Stock accounts

There are four types of stock accounts in CCASS: (i) Stock Clearing Accounts, (ii) Stock Segregated Accounts, (iii) Stock Lending Accounts and (iv) Stock Collateral Control Accounts. Each participant has one Stock Clearing Account (Account Number 1), and up to ten Stock Segregated Accounts without statements (Account Number 2 to 11). Stock Segregated Accounts with Statement Service are also available starting from Account Number 21 onwards, account numbers starting from the range 80000000 to 89999999 are reserved for internal use. Broker participants have an additional Stock Collateral Control Account (Account Number 20).

Stock Clearing Accounts (A/C 1) are used primarily to settle transactions in CCASS. Securities, if available and subject to the money settlement method elected, are debited from the Stock Clearing Account of the delivering participant for transactions settled under the multiple batch settlement runs. If the delivering participant chooses to effect delivery by a Delivery Instruction (DI), he may decide to debit from any of his stock accounts (except Stock Segregated Accounts with Statement Service which require affirmation), subject to availability of securities. In either of the above cases, a corresponding quantity of securities will be credited to the Stock Clearing Account of the receiving participant.

Stock Lending Accounts (A/C 19) are used by participants who apply as lenders for stock lending purpose. All securities credited to the Stock Lending Accounts will be used by HKSCC for lending purpose in accordance with CCASS rules.

Stock Collateral Control Accounts (A/C 20) are used by broker participants as a memorandum account and reflect the collateral balances of the participant under the Common Collateral Management System (CCMS).

Stock Segregated Accounts are provided to facilitate participants' internal record keeping and can be used in whatever manner they consider appropriate. Except for the first Segregated Account (A/C 2), HKSCC does not have access to participants' Stock Segregated Accounts except for the recovery of defective securities in accordance with CCASS rules. Securities in Stock Segregated Accounts are only used at the specific instructions of the participants.

Stock Account 2 is named the EntitlementAccount which is used by HKSCC for distributing benefit entitlements to participants and for effecting adjustments in benefit entitlements. Participants can choose to assign names for the remaining segregated accounts (i.e. remaining 9 Stock Segregated Accounts without statements and Stock Segregated Accounts with statements) at their will.

Participants who wish to open Stock Segregated Accounts without statement should submitwritten request to HKSCC. Stock Segregated Accounts with Statement Service ("SSA with Statement Service") are maintained by Broker and Custodian Participants. Person(s) named and/or maintained by Broker/Custodian Participant in respect of a SSA with Statement Service ("SSA Statement Recipient") will receive statements from CCASS. Besides, SSA Statement Recipients are able to enquire stock movements and account balances, enquire, give and change voting instructions, enquire and affirm Stock Segregated Account Transfer Instructions (STIs) via the CCASS Internet System and CCASS Phone System. Statements in electronic form will also be available on the CCASS Internet System. SSA Statement Recipients are also able to subscribe to receive alert messages relating stock movement, STIs and voting information of the accounts via Short Message Service (SMS) and/or email. When a SSA with Statement Service is added or deleted from CCASS and there is any change in the personal details and/or designated bank account information of the accounts, a notification letter will be sent to the corresponding SSA Statement Recipients, and alert message will be issued via SMS and/or email, if applicable.

A participant is able to move securities between stock accounts 1 and 19 by inputting an Account Transfer Instruction ("ATI"), which is effected immediately upon input. Mass ATI is also available for participants to move securities from their Stock Clearing Account (A/C 1) to a designated account (A/C 2 to 19), which is effected at day end processing. After the introduction of Common Collateral Management System (CCMS), A/C 20 will become a memorandum account. The ATI function will not be applicable to A/C 20 and participants should use CCMS functions to effect stock movements for this account.

A participant is able to move securities from and/or to a SSA with Statement Service (A/C 21 onwards) by inputting a Stock Segregated Account Transfer Instruction ("STI"). There are two types of STI:

1. Without Affirmation: STI input (and authorised, if required) by a participant where the STI affirmation requirement of the delivering SSA with Statement Service is not being selected. It will be effected immediately upon input.
2. With Affirmation:STI input (and authorised, if required) by a participant where the STI affirmation requirement of the delivering SSA with Statement Service is being selected. Such STI requires the SSA Statement Recipient to affirm before the transfer is being effected by CCASS.

Mass STI is also available for participants to transfer securities to SSA with Statement Service and it is effected at day end processing.

STI can be settled on a ‘Free of Payment' (FOP) or ‘Delivery verse Payment' (DVP) basis. STI between SSA with Statement Service should be settled on a "Free of Payment" (FOP). DVP STI is only available to the transferring of Eligible Securities out from a SSA with Statement Service (i.e. with payment to be credited to the SSA Statement Recipient). Upon the completion of transfer of a DVP STI, HKSCC will issue EPI as normal to instruct the Designated Bank of the Participant to effect payment by crediting the payment amount to the Designated Bank Account of the SSA Statement Recipient.