32. In this Chapter, unless the context otherwise requires- "central counter-party" means a corporation, association, partnership, agency or other service provider or person involved in a clearing and settlement system with whom all payment rights and obligations of the participants are netted to produce a single amount owing as between each participant and the central counter-party; "clearing and settlement system" means a system or arrangement for the clearing or settlement of payment obligations in the financial system, in any currency, and in which there is a minimum of three participants, at least one of whom is a financial institution; and includes a system or arrangement for the clearing or settlement in the official currency of Sri Lanka, or for securities transactions, foreign exchange transactions or other transactions or financial contracts where the system or arrangement also clears or settles payment obligations arising from those transactions and contracts; "clearing house" means a corporation, association, partnership, agency or organization or other entity or person that provides clearing or settlement services for a clearing and settlement system, but does not include the Central Bank; "designated clearing and settlement system" means a clearing and settlement system designated under this Chapter; "financial institution" means -
| (i) a licensed commercial bank within the meaning of the Banking Act, No. 30 of 1988 ; |
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| (ii) such other person, entity or person, or entity within a class of persons, or service providers engaged primarily in the business of providing financial services and which are designated by the Central Bank to be a financial institution for the purposes of this Chapter ; |
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"financial system" means the financial system of Sri Lanka ; "net termination value" means the net amount obtained after setting off or otherwise netting the obligations between the parties to a netting agreement in accordance with the provisions of such agreement; "netting agreement" means an agreement between two or more financial institutions or between the Central Bank and one or more financial institutions that provides for the netting or set off of present or future obligations to make payments against the present or future rights to receive payments ; "participant" means a member of a clearing house or a party to an arrangement that establishes a clearing and settlement system ; "risk to the financial system of Sri Lanka" means the risk that the inability of a participant to meet its obligations in a clearing and settlement system as they become due, or a disruption to a clearing and settlement system, that could through the transmittal of financial problems into the system, cause -
| (i) other participants in the clearing and settlement system to be unable to meet their obligations as they become due ; |
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| (ii) financial institutions in other parts of the financial system of Sri Lanka to be unable to meet their obligations as they become due, or |
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| (iii) the clearing and settlement system's clearing house or the clearing house of another clearing and settlement system within the financial system of Sri Lanka to be unable to meet its obligations as they become due. |
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Sri Lanka Consolidated Acts