THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED ORDINANCE

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED ORDINANCE

LAWS OF HONG KONG

THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED ORDINANCE

CHAPTER 70





CHAPTER 70

THE HONGKONG AND SHANGHAI BANKING CORPORATION
LIMITED ORDINANCE

ARRANGEMENT OF SECTIONS

Section..................................... Page
1. Short title ............................2
2. Interpretation .........................2
3. Incorporation ..........................3
4. Regulations: effect, amendment and proof 3
5. Objects, conduct of business and closures 4
6. Power to sell and convert property taken as security 4

7. Capital and increase thereof ..........5
8. Alteration of capital .................5
9. Reorganization of capital .............5
10. Power to issue bearer notes ..........6

11......................Amount of and security for note issue 6
12............................Liability of shareholders 7
13................................Form of contracts 7
14......................Bills of exchange and promissory notes 7
15.................Limit of accommodation to directors and officers 8

16. Limit of debts and liabilities .......8
17. Winding-up and application ...........8

18. Saving.........................................................................................................................
...........................................8





CHAPTER 70

THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED

Toamend the constitution of The Hongkong and Shanghai Banking Corporation
Limited.

(Replaced 37 of 1950 Schedule. Amended L.N. 333 of 1989)

[17 May 1929]

Originally 6of 1929 (Cap. 70,1950) -33 of 1939,8 of 1946,20 of 1948,37 of 1950,27 of 1953,36
of 1957,25 of 1961,5 of 1965, G.N. 761 of 1965, L.N. 60 of 1969, L.N. 127 of 1973,92 of
1975, 6 of 1978,21 of 1978, R. Ed. 1983, L.N. 333 of 1989

1. Short title

This Ordinance may be cited as The Hongkong and Shanghai Banking

Corporation Limited Ordinance.
(Replaced 37 of 1950 Schedule.Amended L.N. 333 of 1989)

If

2. Interpretation

In this Ordinance, unless the context otherwise requires-

,,auditor' means auditor of the bank;

'bank' means 'The Hongkong and Shanghai Banking Corporation Limited' created
by virtue of the provisions of the Hongkong and Shanghai Bank Ordinance
1866 (5 of 1866), and continued by this Ordinance; (Amended 33 of 1939; G.N.
840 of 1940 Supp. Schedule; 37 of 1950 Schedule; L.N. 333 of 1989)

'board' means board of directors and (if the context so requires) means the directors
assembled at a meeting of the board;

'capital' means the share capital for the time being of the bank;

'chairman' means the chairman or his deputy presiding at any meeting of
shareholders or of the board;

'chief accountant' means the person for the time being performing the duties of
chief accountant of the bank at the head office;

'chief manager' means the person for the time being performing the duties of chief
manager, and 'acting chief manager' means the person for the time being
performing the duties of acting chief manager of the bank; (Amended 8 of 1946
s. 2)





'court' means the High Court of the Colony and includes any judge or judges
thereof, sitting either together or separately, in court or in chambers; (Amended
92 of 1975 s. 59)

'directors' means the directors for the time being of the bank or (if the context so
requires) directors present and voting at a meeting of the board;

'dividend' includes any interim dividend, bonus or profits on any share;

'dollar' means dollar in Hong Kong currency;

'general meeting' means a general meeting of shareholders;

'head office' means the principal place of business in the Colony for the time being
of the bank;

'incapacitated shareholder' means a shareholder being an infant, or an idiot or
lunatic, or non compos mentis, or a bankrupt or one whose estate has, by the
operation of law, become vested in any other person or persons in trust for or
for the benefit of his creditors; (Amended 33 of 1939; G.N. 840 of 1940 Supp.
Schedule)

'Ordinance' or 'the Ordinance' means this Ordinance;

'ordinary resolution' means a resolution of a simple majority of shareholders at a
general meeting;

'person' includes a firm, company or corporation;

'regulations' means the regulations of the bank for the time being in force;

',share' means share in the share capital of the bank;

'shareholder' or 'holder of a share' or 'holder of any share' means every person
whose name is entered in any register of shareholders of the bank as a holder of
any share or shares.

3. Incorporation

Notwithstanding the repeal of the Hongkong and Shanghai Bank

Ordinance 1866 (5 of 1866), the bank shall continue to be incorporated by the name
of 'The Hongkong and Shanghai Banking Corporation Limited', and by that name
shall and may sue and be sued in all courts, and in that name shall continue to have
perpetual succession, with a common seal which it may vary and change at its
pleasure: Provided that there shall be no limit whatever to the period of

incorporation.

(Replaced 33 of 1939; G.N. 840 of 1940 Supp. Schedule; 37 of 1950
Schedule. Amended L.N. 333 of 1989)

4. Regulations: effect amendment and proof

(1) The regulations are hereby substituted for and shall replace the deed

of settlement dated 20 July 1867, and all the articles contained therein and any
amendments thereof, and shall be for all purposes the regulations of the bank,





and this Ordinance and the regulations shall be binding in all respects upon the bank
and upon all persons whatsoever, whether shareholders or not, and shall regulate
the rights and liabilities of all the above persons inter se, their heirs, executors,
administrators, assigns or successors. (Amended 33 of 1939; G.N.

If

840 of 1940 Supp. Schedule)

(2) At any time and from time to time it shall be lawful for the shareholders by
special resolution to amend the provisions of the regulations or any of them:

Provided that no such amendment shall be valid or have any force or effect until
it has been approved by the Governor and published in the Gazette. Any such power
to amend as aforesaid includes the power to amend, vary, rescind, revoke or
suspend any regulation or any part thereof and the power to make any new
regulation. (Amended 33 of 1939; G.N. 840 of 1940 Supp. Schedule)

(3) A copy of the regulations and of any such special resolution to amend,
purporting to be certified by the Chief Secretary to be a correct copy, shall be
received in all courts of justice, and for all purposes, as valid and sufficient evidence
of the contents of the regulations and of the fact that such regulations have been
duly approved and published in the Gazette.

5. Objects, conduct of business and closures

(1) The objects of the bank shall be the carrying on the business of banking and
as ancillary thereto the other businesses and objects set forth and contained in
regulation 3 of the regulations, and the bank shall be at liberty to continue,
commence, carry on and effect all or any of its objects at any of its establishments,
that is to say, at its head office and also at its present branches, agencies and sub-
agencies and also at any additional branches, agencies and sub-agencies whether in
the Colony or elsewhere which may hereafter be established:

Provided that the business of the bank's branches, agencies and sub-agencies
shall conform to the laws relating to banking whether passed before or after the date
of this Ordinance in any of the territories in which the powers hereby conferred are
exercised. (Amended 37 of 1950 Schedule; 36 of 1957s.2)

(2) The bank shall have power to close any of its establishments.

6. Power to sell and convert property taken as security

It shall be lawful for the bank to sell, dispose of and convert into money any
real or personal property of whatever description, mortgaged, charged, pledged or
hypothecated to the bank or taken by it in satisfaction, liquidation or payment of
any debt or liability.





7. Capital and increase thereof

(1) The capital of the bank is $18,000 million divided into 7,200 million shares of
$2.50 each. (Amended G.N. 761 of 1965; L.N. 60 of 1969; Gazette of 10.4.1970
PN544; L.N. 127 of 1973 Resolutions 1 & 3; EGM 27.3.1975; EGM 20.4.1979;
EGM 25.4.1980; EGM 9.4.1981; 0 YGM 14.5.1985; AGM 10.5.1988)

(2) The capital of the bank may from time to time be increased by ordinary
resolution. (Replaced 36 of 1957 s. 3)

8. Alteration of capital

The shareholders in general meeting shall, in addition to the power hereinbefore
conferred of increasing the capital of the bank, have power by ordinary resolution

(a)to consolidate and divide all or any of the capital of the bank into
shares of larger nominal amount than its existing shares;

(b)to subdivide its shares or any of them into shares of smaller amount
than is fixed by this Ordinance or by the regulations, so however that
in the subdivision the proportion between the amount paid and the
amount, if any, unpaid on each reduced share shall be the same as it
was in the case of the share from which the reduced share is derived;
(Amended 36 of 1957 s. 4(a))

(c)to convert any paid-up shares into stock and re-convert that stock
into paid-up shares of any amount; and (Added 36 of 1957 s. 4 (c))

(d)to cancel shares which at the date of the passing of the resolution in
that behalf have not been taken or agreed to be taken by any person,
and to diminish the amount of its capital by the amount of the shares
so cancelled, and a cancellation of shares in pursuance of this section
shall not be deemed to be a reduction of capital. (Amended 36 of
1957 s. 4(b))

9. Reorganization of capital

(1) The shareholders may by special resolution reorganize the capital, whether
by the consolidation of shares of different classes or by the division of the shares
into shares of different classes: (Amended 5 of 1965 s. 2)

Provided that no preference or special privilege attached to or belonging to any
class of shares shall be interfered with except by a resolution passed by a majority in
number of shareholders of that class holding three-fourths of the share capital of
that class and confirmed at a meeting of shareholders of that class in the same
manner as a special resolution of the bank is required to be confirmed, and every
resolution so passed shall bind all shareholders of the class.





(2) A copy of any such resolution shall be filed with the Chief Secretary within
7 days after the passing of the same or within such further time as the Governor may
allow, and the resolution shall not take effect until such copy has been so filed.

10. Power to issue bearer notes

(1) Subject to the provisions of subsection (2) and of the Bank Notes Issue
Ordinance (Cap. 65), the bank may in the Colony, but not elsewhere, issue, re-issue
and circulate notes of the bank payable to bearer on demand. (Amended 21 of 1978s. 3)

(2) The bank shall not issue such notes of a denomination lower than five
dollars in excess of such number as may, from time to time, be authorized by the
Secretary of State.

(Replaced 36 of 1957 s. 5)

11. Amount of and security for note issue

(1) The total amount of the notes of the bank payable to bearer on demand
actually in circulation shall subject to the provisions of subsection (3) not at any time
exceed the equivalent of the sum of $60 million. (Amended 37 of 1950 Schedule; 27 of
1953 s. 2; 6 of 1978 s. 2)

(2) The bank shall at all times keep deposited with the Crown Agents or with
trustees appointed by the Secretary of State or partly with the Crown Agents and
partly with such trustees securities, approved by the Secretary of State, not less in
value than the said sum of $60 million. (Replaced 36 of 1957 s.6(a). Amended6of 1978s. 2)

(3) Notwithstanding the provisions of subsection (1), notes of the bank payable
to bearer on demand may be issued and be in actual circulation to an amount in
excess of the equivalent of the said sum of $60 million, if there has been paid in
accordance with section 4(1) of the Exchange Fund Ordinance (Cap. 66) to the
Financial Secretary of the Hong Kong Government for the account of the Exchange
Fund referred to in such Ordinance and against the issue to the bank of certificates
of indebtedness as provided in such Ordinance an amount equal to the face value of
such excess issue for the time being actually in circulation. (Replaced 37 of 1950
Schedule. Amended 27 of 1953 s. 2; 36 of 1957 s. 6(b); 6 of 1978 s. 2)

(4) The securities deposited in accordance with subsection (2), and, as provided
in section 4 of the Exchange Fund Ordinance (Cap. 66), the whole of the amount paid
in accordance with subsection (3) for the account of the Exchange Fund, shall be
held as special funds exclusively available for the redemption of the said notes and
in the event of the bank being wound up shall





be applied accordingly so far as may be necessary, but without prejudice to the
rights of the holders of such notes to rank with other creditors of the bank against
the assets of the bank. (Added36 of 1957s.6(c))

12. Liability of shareholders

In the event of the bank being wound up every shareholder shall be liable to
contribute to the assets of the bank, in respect of any debts and liabilities of the
bank, an amount not exceeding the amount, if any, unpaid on the shares held by him.

(Replaced 36 of 195 7 s. 7)

13. Form of contracts

(1) Contracts on behalf of the bank may be made as follows(Amended 33 of
1939; G.N. 840 of 1940 Supp. Schedule)

(a)any contract, which if made between private persons would be by law
required to be in writing under seal, may be made on behalf of the
bank in writing under seal and may in the same manner be varied or
discharged;

(b)any contract, which if made between private persons would be by law
required to be in writing signed by the parties to be charged
therewith, may be made on behalf of the bank in writing, signed by
any person acting under its authority, express or implied, and may in
the same manner be varied or discharged;

(c)any contract, which if made between private persons would by law be
valid although made by parol only and not reduced into writing, may
be made by parol on behalf of the bank by any person acting under
its authority, express or implied, and may in the same manner be
varied or discharged.

(2) All contracts made according to this section shall be effectual in law and
shall bind the bank and its successors and all other parties thereto, their heirs,
executors, administrators or assigns or successors, as the case may be.

14. Bills of exchange and promissory notes

A bill of exchange or promissory note shall be deemed to have been made,
accepted or indorsed on behalf of the bank if made, accepted or indorsed in the
name of or by or on behalf or on account of the bank by any person acting under its
authority.





15. Limit of accommodation to directors and officers

The bank shall not discount, or in any manner advance money upon, bills of
exchange, promissory notes or other negotiable paper in or upon which the name of
any director or officer of the bank appears as drawer or acceptor, either on his
individual or separate account, or jointly with any partner, or otherwise than as a
director or officer of the bank to an amount exceeding one-tenth of the amount of the
sum for the time being under discount or advanced by the bank, nor shall any
director be allowed to obtain credit on his own personal guarantee.

16. Limit of debts and liabilities

The total amount of the debts and liabilities of the bank of what nature or kind
soever shall not at any time exceed the aggregate amount of the then existing bona
fide assets and property of the bank.

(Amended 36 of 1957 s. 8)

17. Winding-up and application

(1) Subject as hereinafter mentioned, the bank may be wound up by the court,
and all the provisions of the Companies Ordinance (Cap. 32), with respect to the
winding-up of companies registered thereunder shall apply to the bank as if expressly
re-enacted in this Ordinance, save and except in such respects as the same may be
altered or modified as hereafter mentioned or provided for. (Amended 33 of 1939;
G.N. 840 of 1940 Supp. Schedule; 20 of 1948)

(2) The circumstances under which the bank may be wound up are as follows

(a)in the event of the bank being dissolved or ceasing to carry on
business or carrying on business only for the purpose of winding-up
its affairs; or

(b) whenever the bank is unable to pay its debts; or

(c)whenever the court is of opinion that it is just and equitable that the
bank should be wound up.

18. Saving

Nothing in this Ordinance shall affect or be deemed to affect the rights of Her
Majesty the Queen, Her Heirs or Successors, or the rights of any body politic or
corporate or of any other persons except such as are mentioned in this Ordinance
and those claiming by, from or under them.

(Amended 33 of 1939; G.N. 840 of 1940 Supp. Schedule)

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