BANKING ORDINANCE
Title
BANKING ORDINANCE
Description
LAWS OF HONG KONG
BANKING ORDINANCE
CHAPTER 155
CHAPTER 155
BANKING ORDINANCE
ARRANGEMENT OF SECTIONS
Section..................................... Page
PART 1
PRELIMINARY
1. Short title and commencement .............. ... ... ... ... ... ... ... 7
2, Interpretation ............................... ... ... ... ... ... ... 7
3. Application .......................... ... ... ... ... ... ... ... ... 12
PART 11
APPOINTMENTS, FUNCTIONS OF COMMISSIONER,
REPORTS BY COMMISSIONER AND POWER OF
GOVERNOR To GIVE DIRECTIONS
4...................Banking Advisory Committee ... ... ... ... ... ... ... ... 14
5, Deposit-taking Companies Advisory Committee... ... ... ... ... ... ... 14
6.................Commissioner of Banking ....... ... ... ... ... ... ... ... ... ... 15
7...................Functions of Commissioner ... ... ... ... ... ... ... ... ... 15
8. Commissioner may employ assistants ...... ... ... ... ... ... ... ... ... 15
9.................Reports by Commissioner ....... ... ... ... ... ... ... ... ... ... 16
10. Power of Governor to give directions ... ... ... ... ... ... ... 16
PART 111
BANKING BUSINESS AND BUSINESS OF TAKING DEPOSITS TO BE
CARRIED ON BY AUTHORIZED INSTITUTIONS ONLY
11. Banking business restricted to licensed banks ... ... ... ... ... ... ... ... 16
12. Restriction on business of taking deposits ... ... ... ... ... ... ... ... ... 17
13. Power to grant exemptions ... ... ... ... ... ... ... ... ... ... ... ... 17
14. Deposit-taking company not to take deposits less than specified sum ... ... ... is
PARTIV
LICENSING AND REGISTRATION OF AUTHORIZED INSTITUTIONS
AND KEEPING OF REGISTER
15..................Application for banking licence ... ... ... ... ... ... ... 19
16..................Grant or refusal of banking licence ... . ... ... ... ... ... 19
17..................Amendment of conditions of banking licence ... ... ... ... ... ... ... 20
is. Minimum paid-up share capital for grant of banking licence ... ... ... ... ... 20
19. Banking licence fees ... ... ... ... ... ... ... ... ... ... ... ... ... 20
20. Application for registration as deposit-taking company ... ... ... ... ... ... 21
21. Registration or refusal of registration of deposit-taking company ... ... ... ... 21
22. Amendment of conditions of registration ... ... ... ... ... ... ... ... ... 22
Section ........................... Page
23. Registration fees....................... ... ... ... ... ... ... ... 23
24. Application for deposit-taking licence ... ... ... ... ... ... ... ... 23
25. Grand or refusal of deposit-taking licence .................. ... ... ... ... 24
26 Deposit-taking licence fees ............... ... ... ... ... ... ... ... ... 24
27. Register of authorized institutions, etc . ... ... ... ... ... ... ... ... 25
28. Publication of names entered in or removed from register and suspensions ... 26
PART V
REVOCATION OF LICENCE OR
REGISTRATION
OF AUTHORIZED INSTITUTION
29...................Revocation of banking licence ... ... ... ... ... ... ... ... 26
30. Procedure on and effect of revocation of banking licence ... ... ... ... ... 27
31.................Revocation of registration ... ... ... ... ... ... ... ... ... ... ... 27
32......................Revocation of deposit-taking licence ... ... ... ... ... ... ... ... ... 28
33. Procedure on and effect of revocation of registration or deposit-taking licence 30
PART VI
SUSPENSION OF DEPOSIT-TAKING COMPANY
34............Interpretation .................. ... ... ... ... ... ... ... ... 30
35. Temporary suspension of registration or deposit-taking licence in an emergency 30
36. Suspension of registration or deposit-taking licence for a period up to 6 months 31
37. Opportunity of being heard ... ... ... ... ... ... ... ... ... ... ... 31
38. Effect of suspension............. ... ... ... ... ... ... ... ... ... ... 31
PART VII
TRANSFER OF LICENCE OR
REGISTRATION
OF AUTHORIZED INSTITUTIONS
39............Interpretation .................. ... ... ... ... ... ... 1 ... ... 32
40.....................Transfer of licence or registration ... ... ... ... ... ... ... ... ... 32
41................Application for transfer .... ... ... ... ... ... ... ... ... ... ... 32
42................Certificate of transfer, etc . ... ... ... ... ... ... ... ... ... ... ... 33
43. Liabilities and privileges of transferer and transferee ... ... ... ... ... ... 33
PART VIII
LOCAL BRANCHES, LOCAL REPRESENTATIVE OFFICES
AND FEES
44...........................Control of establishment, etc. of local branches ... ... ... ... ... ... 33
45.....................Fees in respect of local branches ... ... ... ... ... ... ... ... 34
46................................Control of establishment, etc. of local representative offices ... ... ... ... 34
47. Supply of information and examination of local representative offices ... ... ...
35
48. Fees in respect of local representative offices 36
Section Page
PART IX
OVERSEAS BRANCHES, OVERSEAS REPRESENTATIVE OFFICES AND FEES
49. Control of establishment, etc. of overseas branches and overseas representative
offices ............................... ... ... ... ... ... ... ... ... 37
50. Conditions regarding overseas branches and overseas representative offices 38
51. Fees in respect of overseas branches and overseas representative offices ... 40
PART X
POWERS OF CONTROL OVER AUTHORIZED
INSTITUTIONS
52.................Powers of Commissioner ...... ... ... ... ... ... ... ... ... 40
53.................Powers of Governor in Council ... ... ... ... ... ... ... ... ... ... 42
54. Remuneration and expenses of Commissioner and others in certain cases 42
55. Examination and investigation of authorized institutions, etc. ... ... ... ... 43
56............................Production of authorized institution's books, etc . ... ... ... ... ... ... 43
57..............................Control of authorized institution by the Commissioner ... ... ... ... ... 44
58. Authorized institution under control of Commissioner to co-operate with
Commissioner .............................. ... ... ... ... ... ... 45
PART XI
AUDITS AND MEETINGS
59........Audit ................................ ... ... ... ... ... ... ... ... 46
60. Publication of audited balance sheet, etc, . ... ... ... ... ... ... ... ... ...
61. Meetings............................... ... ... ... ... ... ... ... ... ... 48
62. Comissioner may make complaint where there is misconduct, etc. by auditor 48
PART XII
DISCLOSURE OF INFORMATION BY AUTHORIZED
INSTITUTIONS
63. Returns and information to be submitted to the Commissioner ... ... ... ... 48
64.....................Information on sharcholding, etc . ... ... ... ... ... ... ... ... ... 50
65................Alteration in constitution ... ... ... ... ... ... ... ... ... ... ... 51
66. Authorized institution to notify Commissioner when it ceases to take deposits 52
67.........................Duty to report inability to meet obligations ... ... ... ... ... ... ... 52
68.........................Examination by authorities outside Hong Kong ... ... ... ... ... ... ... 52
PARTXIII
OWNERSHIP AND MANAGEMENT OF AUTHORIZED
INSTITUTIONS
69.......................Amalgamation, etc. requires approval ... ... ... ... ... ... ... ... 52
70. Commissioner's approval required for exercise of certain acquired voting power 54
71. Chief executives, directors and secretaries require Commissioner's approval 55
72.......................................Controllers of authorized institutions require Commissioner's approval ... 56
Section Page
73. Certain persons prohibited from acting as employees of authorized institutions
except with consent of Commissioner ........ ... ... ... ... ... ... 57
74. Appointment of chief executive ....... . ... ... ... ... ... ... 57
PART XIV
SHARE CAPITAL, RESERVE AND
DIVIDEND
OF AUTHORIZED INSTITUTIONS
75. Maintenance of reserve .................. ... ... ... ... ... ... ... 58
76. Maintenance of adequate provision for bad and doubtful debts and for
diminution of value of assets ......... ... ... ... ... ... ... ... ... 59
77. Minimum paid-up share capital of licensed banks ... ... ... ... ... ... 59
78. Restriction on distribution of extraordinary profits ... ... ... ... ... ... 59
PART XV
LIMITATIONS ON LOANS BY AND
INTERESTS
OF AUTHORIZED INSTITUTIONS
79. Interpretation and application .......... ... ... ... ... ... ... ... ... 60
80. Advance against security of own shares, etc . ... ... ... ... ... ... ... 61
81. Limitation on advances by authorized institutions ... ... 62
82. Commissioner may publish guidelines on business practices of authorized
institutions ............................... ... ... ... ... ... ... ... 67
83. Limitation on advances to directors, etc. of bank ... ... ... ... ... ... 68
84. Limitation on advances to directors, etc. of deposit-taking companies ... ... ... 69
85. Limitation on advances to employees...... ... ... ... ... ... ... ... ... 72
86. Powers of Commissioner where moneys placed with foreign bank ... ... 72
87. Limitation on shareholding by authorized institutions ... ... ... ... ... ... 73
88. Limitation on holding of interest in land by authorized institutions ... ... ... 74
89. Limitation on shareholding and holding of interest in land in the case of a
registered deposit-taking company ..... ... ... ... ... ... ... ... .. 75
90. Limitation on aggregate holdings under sections 83, 87 and 88 ... ... ... ... 75
91. Proof of compliance with sections 81, 83, 84, 87, 88, 89 and 90 ... ... 76
PART XVI
ADVERTISEMENTS, REPRESENTATIONS AND USE OF
TITLE 'BANK'
92. Offence to issue advertisements and documents relating to deposits ... ... 77
93. Fraudulent inducement to make a deposit ... ... ... ... ... ... ... 78
94. Liability in tort for inducing persons to make a deposit in certain cases ... .. 1 78
95. False, etc. advertisements by authorized institution ... ... ... ... ... ... 80
96. Certain representations prohibited ...... ... ... ... ... ... ... ... ... 80
97. Restrictions on.use.of title.'bank' . ... ... ... ... ... ... ... ... ... ...80
Section...................................... Page
PART XVII
CAPITAL ADEQUACY RATIO OF AUTHORIZED
INSTITUTIONS
98. Capital adequacy ratio .................. ... ... ... ... ... ... ... ... 81
99. Failure to keep to capital adequacy ratio ... ... ... ... ... ... ... ... 81
100............Remedial action .............. ... ... ... ... ... ... ... ... ... ... 82
101. Commissioner may increase capital adequacy ratio for particular authorized
institutions ............................... ... ... ... ... ... ... ... 82
PART XVIII
LIQUIDITY RATIO OF AUTHORIZED INSTITUTIONS
AND MATTERS AFFECTING LIQUIDITY RATIO
102. Liquidity ratio.................... ... ... ... ... 1 . .. 1 ... ... ... 83
103...................Failure to keep to liquidity ratio ... ... ... ... ... ... ... ... ... ... 83
104............Remedial action .............. ... ... ... ... ... ... ... ... ... ... 84
105. Commissioner may vary liquidity ratio for particular authorized institutions 84
106. Authorized institutions not to create certain charges and to notify Commissioner of
certain civil proceedings................ ... ... ... ... ... ... ... 85
PART XIX
UNINCORPORATED BANKS
107. Grant of banking licence to unincorporated banks ... ... ... ... ... ... 86
108. Application for banking licence under section 107 ... ... ... ... ... ... 86
109. Banking licence fee for unincorporated bank ... ... ... ... ... ... ... 86
110. Auditor .......................... ... ... ... ... . ... ... 86
111. General application of Ordinance to unincorporate banks and members ... .....87
112. Application of sections of Ordinance to unincorporated banks ... ... ... ... 87
113..................Prohibition on use of word 'bank .. ... ... ... ... ... ... ... ... ... 88
114..................Prohibition on total of deposits .. ... ... ... ... ... ... ... ... ... 88
115. Death of member of unincorporated bank ... ... ... ... ... ... ... 88
116. Bankruptcy of unincorporated bank ... ... ... ... ... ... ... ... ... 89
PART XX
INVESTIGATIONS OF AUTHORIZED INSTITUTIONS
117. Investigations on behalf of the Financial Secretary ... ... ... ... ... ... 90
118. Powers of the inspector and offences in connection with the investigation ... ... 92
PART XXI
MISCELLANEOUS
119. Governor in Council to decide whether or not banking business or business of
taking deposits is being conducted .... ... ... ... ... ... ... ... ... 93
120. Official secrecy ... ... ... ... ... ... ... ... ... ... ... ... ... ... 93
Section...................................... Page
121................................Disclosure of information relating to authorized institutions ... ... ... ... 95
122.......................Winding-up of authorized institutions ... ... ... ... ... ... ... ... 96
123. Offences by directors, managers, trustees, employees and agents ... ... ... ... 97
124.........................Prohibition on receipt of commission by staff ... ... ... ... ... ... ... 97
125...................Search warrants and seizures ... ... ... ... ... ... ... ... ... ... 98
126. Defence where director or manager, etc. prosecuted ... ... ... ... ... ... 98
127..........Indemnity ...................... ... ... ... ... ... ... ... ... ... 99
128.....................Execution of instruments under seal ... ... ... ... ... ... ... ... ... 99
129. Validity of contract in contravention of this Ordinance or any Ordinance repealed
by this Ordinance .......................... ... ... ... ... ... ... 99
130. Action for recovery of deposits, etc . ... ... ... ... ... ... ... ... ... ... 99
131. Recovery of fees, expenses, etc . ... ... ... ... ... ... ... ... ... ... ... 100
132. Use of English language .... ... ... ... ... ... ... ... ... ... ... 100
133..............Power to specify forms ..... ... ... ... ... ... ... ... ... ... ... ... 101
134..............Service of documents .......... ... ... ... ... ... ... ... ... ... ... 101
135.................Power to amend Schedules ... ... ... ... ... ... ... ... ... ... ... 101
136.................Consent of Attorney General... ... ... ... ... ... ... ... ... ... ... 101
137.................Amendments Incorporated] ... ... ... ... ... ... ... ... ... ... ... 101
137A. Exclusion of provisions of Gambling Ordinance ... ... ... ... ... ... ... 101
PART XXII
TRANSITIONAL, SAVINGS AND
REPEAL
138.............Interpretation ............. ... ... ... ... ... ... ... ... ... 101
139.................................Appointed members of former committees to continue in office ... ... ... 102
140........................Former Commissioner to continue in office ... ... ... ... ... ... ... 103
141. Authorized and employed persons to continue to be authorized and employed 103
142. Former applications for licences, etc. deemed to be applications under this
Ordinance ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 103
143....................................Former licences, etc. deemed to be licences, etc. under this Ordinance ... ... 104
144. Date of payment of certain fees 104
145. Conditions attached to former licences, etc. deemed to be conditions under
this Ordinance ... ... ... ... ... ... ... ... ... ... ... ... ... ... 105
146. Suspension of former registration, etc. deemed to be suspension under this
Ordinance ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 106
147. Actions, etc. under Part IV of former Banking Ordinance deemed to be
actions under Part X of this Ordinance ... ... ... ... ... ... ... ... ... 106
148. Transitional provisions in relation to section 81 ... ... ... ... ... ... ... 107
148A. Transitional provisions in relation to section 87 ... ... . ... ... ... ... 108
149. Repeat .......................... ... ... ... ... ... 108
First Schedule- Specified Sum ... ... ... ... ... ... ... ... ... ... ... ... 108
Second Schedule. Fees ... ... ... ... ...
... ... ... ... ... ... ... ... ... 109
Third Schedule. Capital Adequacy Ratio ... ... ... ... ... ... ... ... ... ... 109
Fourth Schedule. Liquidity Ratio ... ... ... ... ... ... ... ... ... ... ... ... 112
Fifth Schedule. Perpetual Subordinated Debt ... ... ... ... ... ... ... ... ... 113
CHAPTER 155
BANKING
To regulate banking business and the business of taking deposits and
to make provision for the supervision of authorized institutions so
as to provide a measure of protection to depositors and to promote
the general stability and effective working of the banking system,
and to provide for matters incidental thereto or connected
therewith.
[The Ordinance, other than Part XVII: 1 September 1986.]
PART 1
PRELIMINARY
1. (1) This Ordinance may be cited as the Banking Ordinance.
(2) This Ordinance shall come into operation on a day to be
appointed by the Governor by notice in the Gazette and the Governor
may appoint different days for different provisions.
2. (1) In this Ordinance, unless the context otherwise requires
,,accounts' means any accounts, whether kept in writing or print or by
any machine or device;
'advertisement' means any form of advertising, whether notified or
published
(a)in a newspaper, magazine, journal or other periodical
publication;
(b) by the display of posters or notices;
(e) by means of circulars, brochures, pamphlets or handbills;
(d)by an exhibition of photographs or cinematograph films; or
(e) by way of sound broadcasting or television,
and references to the issue of an advertisement shall be construed
accordingly;
'approved currency' means a currency
(a) freely convertible into Hong Kong dollars; or
(b) approved by the Commissioner; (Added, 64 of 1987, s. 2)
'auditor' means a professional accountant holding a practising
certificate under the Professional Accountants Ordinance;
'authorized institution' means
(a) a bank;
(b) a deposit-taking company.
'authorized institution incorporated in Hong Kong' means an
authorized institution incorporated in Hong Kong by or under the
Companies Ordinance or any other Ordinance and any reference to
a bank incorporated in Hong Kong or a deposit taking company
incorporated in Hong Kong shall be construed accordingly;
'authorized institution incorporated outside Hong Kong' means an
authorized institution incorporated by or under the law or
other authority in any place outside Hong Kong, and in this
respect 'incorporated' includes established and any reference
to a bank incorporated outside Hong Kong king
company incorporated outside Hong Kong rued
accordingly;
'automated teller machine' means a terminal device, whether installed
by a bank or by some other person, which is linked directly or
indirectly to a computer system used by a bank and which provides
facilities to customers of the bank;
'bank' means a company which holds a valid banking licence, ande
includes an unincorporated bank;
'Banking Advisory Committee' means the Banking Advisory Committee
established by section 4;
'banking business' means the business of either or both of the
following--
(a)receiving from the general public money on current, deposit,
savings or other similar account repayable on demand or
within less than 3 months or at call or notice of less than 3
months;
(b) paying or collecting cheques drawn by or paid in by
customers;
'banking licence' means a banking licence granted under section 16 or
107;
'capital adequacy ratio' means the capital adequacy ratio referred to in
section 98;
'certificate of deposit' means a document relating to money, in any
currency, which has been deposited with the issuer or some other
person, being a document which recognizes an obligation to pay a
stated amount to bearer or to order, with or without interest, and
being a document by the delivery of which, with or without
endorsement, the right to receive that stated amount. with or
without interest, is transferable;
'chief executive', in relation to an authorized institution, means the chief
executive appointed under section 74 in respect of the institution;
'Commissioner' means the Commissioner of Banking appointed under
section 6;
'company' means a body corporate
(a) incorporated under the Companies Ordinance;
(b) incorporated by any other Ordinance; or
(c) incorporated or established outside Hong Kong;
'controller', in relation to a company, including a company which is an
authorized institution, means any person
(a)in accordance with whose directions or instructions the
directors of the company or of another company of which it is
a subsidiary are accustomed to act; or
(b)who is entitled to exercise, or control the exercise, of more
than 50 per cent of the voting power at any general meeting of
the company or of another company of which it is a
subsidiary,
and references in this Ordinance to 'control' shall be construed
accordingly:
Provided that a person shall not be deemed to be a person in
accordance with whose directions or instructions the directors of a
company are accustomed to act by reason only that the directors of
the company act on advice given by him in a professional capacity;
'deposit'
(a) means a loan of money-
(i) at interest, at no interest or at negative interest; or
(ii) repayable at a premium or repayable with any
consideration in money or money's worth; but
(b) does not include a loan of money-
(i) upon terms involving the issue, by any company, of
debentures or other securities in respect of which a
prospectus has been registered under the Companies
Ordinance; (Replaced, 64 of 1987, s. 2)
(ii) upon terms referable to the provision of property or
services; or
(iii) by one company to another (neither company being an
authorized institution) at a time when one is a subsidiary of
the other or both are subsidiaries of another company,
and references in this Ordinance to the taking or the making of a
deposit shall be construed accordingly;
'depositor' means a person entitled to repayment of a deposit, whether
made by him or not;
'Deposit-taking Companies Advisory Committee' means the Deposit-
taking Companies Advisory Committee established by section 5;
'deposit-taking company' means
(a) a registered deposit-taking company; or
(b) a licensed deposit-taking company;
'deposit-taking licence' means a deposit-taking licence granted under
section 25;
'director' includes any person who occupies the position of director,
whatever the title of his office;
'document' includes a circular, brochure, pamphlet, poster, handbill,
prospectus and any other document which is directed at or likely to
be read by members of the public; and also includes any
newspaper, magazine, journal or other periodical publication;
'functions' includes powers and duties;
'holding company' and 'subsidiary' have the same meaning as in the
Companies Ordinance;
'issue', in relation to an advertisement or document, includes publish,
circulate, distribute or disseminate the advertisement or document;
and also includes causing the advertisement or document to be
issued;
'licence', in relation to
(a)an authorized institution which is a bank, means a banking
licence; and
(b) an authorized institution which is a deposit-taking company, reasons
a deposit-taking licence,
and references in this Ordinance to a licensed authorized
institution shall be construed accordingly;
'licensed' means licensed under this Ordinance;
'liquidity ratio' means the liquidity ratio referred to in section 102;
'local branch', in relation to
(a) an authorized institution which is a bank, means-
(i) in the case of a bank incorporated in Hong Kong, a place
of business thereof in Hong Kong, other than its principal
place of business in Hong Kong, at which it carries on
banking business; and
(ii) in the case of a bank incorporated outside Hong Kong, a
place of business thereof in Hong Kong, other than its
principal place of business in Hong Kong or a local
representative office thereof, at which it carries on banking
business,
but in either case does not mean an automated teller machine;
and
(b) an authorized institution which is a deposit-taking com-
pany, means a place of business in Hong Kong of a
deposit-taking company, other than its principal place of
business in Hong Kong, at which it carries on the business of
taking deposits;
'local representative office' means an office in Hong Kong of a bank
incorporated outside Hong Kong which is not
(a) licensed under section 16;
(b) a deposit-taking company; and
(c)recognized as the central bank of the place in which it is
incorporated;
'manager' in relation to an authorized institution means its chief
executive and any other person employed by the institution who,
under the immediate authority of a director or of the chief executive,
exercises managerial functions or is responsible for maintaining
accounts or other records of the institution;
'money at call' means money payable within not more than 24 hours of
a demand therefor, but does not include money payable on
demand;
'overseas branch' means a branch outside Hong Kong of an authorized
institution incorporated in Hong Kong, at which it carries on
banking business or a business of taking deposits, as the case may
be, whether or not the business of the branch is limited by the laws
or regulations of the place in which the branch is situated and
whether or not the branch is referred to as an agency in such place;
'overseas representative office' means an office outside Hong Kong,
other than an overseas branch, of an authorized institution
incorporated in Hong Kong;
'perpetual subordinated debt' means any of the debt instruments
specified in the Fifth Schedule;
'register' means the register maintained under section 27;
'registered' means registered under this Ordinance;
'share' means share in the share capital of a company, and includes
stock except where a distinction between stock or shares is
expressed or implied; and the expression 'shareholder' includes a
stockholder;
'short-term deposit' means a deposit with an original term to maturity of
less than 3 months or with a period of call or notice
of less than 3 months;
'specified sum', in relation to
(a) a registered deposit-taking company, means the sum referred
to in section 14(1)(a); and
(b)licensed deposit taking company means the sum referred to in
section 14(1)(b);
'Unified Exchange' has the same meaning as in the Stock Exchanges
Unification Ordinance;
'unincorporated bank' means an unincorporated person or body of
persons holding a valid banking licence granted under section
107.
(2) For the purposes of this Ordinance-
(a) the taking of deposits includes holding out as being prepared
to take deposits;
(b)an advertisement issued by any person by way of display or
exhibition in a public place shall be treated as being issued by
him on every day on which he causes or authorizes it to be
displayed or exhibited;
(c)an advertisement or document which consists of or contains
information likely to lead, directly or indirectly, members of the
public to
(i) make deposits; or
(ii) enter into, or offer to enter into, agreements to make
deposits,
shall be treated as being an advertisement or document which
is or contains an advertisement to members of the public so to
do; and
(d)an advertisement or document issued by one person on behalf
of or to the order of another shall be treated as an
advertisement or document, as the case may be, issued by that
other person.
(3) Without limiting the generality of any other meaning which
'insolvent' may have, an authorized institution shall, for the purposes
of this Ordinance, be deemed to be insolvent if it has ceased to pay its
debts in the ordinary course of business or it cannot pay its debts as
they become due.
(4) Where, under this Ordinance, an authorized institution is
required to provide facilities to any person for the purpose of any
investigation or examination of the institution, such facilities shall
include photocopying facilities.
3. (1) Part 111 of this Ordinance shall not apply to the taking of any
deposit by
(a)a trust company registered under Part VIII of the Trustee
Ordinance;
(b)a credit union registered under the Credit Unions Ordinance;
(c)a company, where such deposit is secured by a mortgage, or
charge, registered or to be registered under the Companies
Ordinance;
(d)a person bona fide carrying on insurance business where such
deposit is taken in the ordinary course of such business;
(e)a person bona fide operating a superannuation or provident
fund where such deposit is taken for the purposes of such
fund;
(f)a public utility company specified in the Third Schedule to the
Inland Revenue Ordinance where such deposit is taken from a
consumer;
(g)an employer where such deposit is taken from a bona fide
employee;
(h)a solicitor, where such deposit is taken from a client, or as a
stakeholder, in the ordinary course of his practice; (Amended,
64 of 1987, s. 3)
(i) the Urban Council or the Regional Council;
(j)a person who is a dealer within the meaning of the Securities
Ordinance where section 84 of that Ordinance applies to such
deposit, or a mutual fund corporation or unit trust authorized
under section 15(1)(r) of that Ordinance;
(k)a person who is registered as a dealer under the Commodities
Trading Ordinance where such deposit is taken from a client in
the ordinary course of his business as a dealer;
(1) any person for remittance outside Hong Kong; or
(Replaced, 64 of 1987, s. 3)
(m)the Exchange Fund established by the Exchange Fund
Ordinance. (Replaced, 64 of 1987,.s. 3)
(2) Part 111 of this Ordinance shall not apply to the taking of any
deposit from
(a) an authorized institution;
(b)a bank incorporated or established outside Hong Kong that is
not licensed under this Ordinance;
(c)a money lender licensed under the Money Lenders Ordinance
in the ordinary course of his business as a money lender; or
(d)a pawnbroker licensed under the Pawnbrokers Ordinance in
the ordinary course of his business as a pawnbroker.
(3) Notwithstanding anything in the Hongkong and Shanghai
Banking Corporation Ordinance, this Ordinance shall apply to The
Hongkong and Shanghai Banking Corporation.
(4) Where there is any conflict or inconsistency between this
Ordinance and the Hongkong and Shanghai Banking Corporation
Ordinance the provisions of this Ordinance shall prevail.
(5) An authorized institution which is incorporated or registered by
or under the Companies Ordinance shall be subject to that Ordinance as
well as to this Ordinance, except that where there is any conflict or
inconsistency between this Ordinance and the Companies Ordinance the
provisions of this Ordinance shall prevail.
PART II
APPOINTMENTS, FUNCTIONS OF COMMISSIONER, REPORTS BY
COMMISSIONER AND POWER OF GOVERNOR TO GIVE DIRECTIONS
4. (1) There is hereby established a Banking Advisory Committee
for the purpose of advising the Governor upon any matter connected
with this Ordinance, in particular in relation to banks and the carrying on
of banking business, and of advising the Governor in Council on each
annual report submitted under section 9(1) and in any case where the
advice of the Committee is sought under section 53(2).
(2) The Banking Advisory Committee shall consist of the Financial
Secretary, who shall be the chairman, the Secretary for Monetary Affairs,
the Commissioner, and such other persons, not being less than 4 nor
more than 12, as the Governor may from time to time appoint.
(3) The members of the Banking Advisory Committee appointed by
the Governor shall hold office for such period and upon such terms as
the Governor may specify in their appointments.
(4) In the absence of the chairman at any meeting of the Banking
Advisory Committee, the Secretary for Monetary Affairs shall act as the
chairman.
5. (1) There is hereby established a Deposit-taking Com-
panies Advisory Committee for the purpose of advising the Gover-
nor upon any matter connected with this Ordinance, in particular in
relation to deposit-taking companies and the carrying on of a
business of taking deposits by such companies, and of advising the
Governor in Council on each annual report submitted under section
9(1) and in any case where the advice of the Committee is sought
under section 53(2).
(2) The Deposit-taking Companies Advisory Committee shall
consist of the Financial Secretary, who shall be the chairman, the
Secretary for Monetary Affairs, the Commissioner, and such other
persons, not being less than 4 nor more than 12, as the Governor may
from time to time appoint.
(3) The members of the Deposit-taking Companies Advisory
Committee appointed by the Governor shall hold office for such
period and upon such terms as the Governor may specify in their
appointments.
(4) In the absence of the chairman at any meeting of the
Deposit-taking Companies Advisory Committee, the Secretary for
Monetary Affairs shall act as the chairman.
6. There shall be a Commissioner of Banking who shall be a
public officer appointed by the Governor.
7. (1) The principal function of the Commissioner shall be
to promote the general stability and effective working of the banking
system.
(2) Without limiting the generality of subsection (1), the
Commissioner shall-
(a)be responsible for supervising compliance with the provi-
sions of this Ordinance;
(b)take all reasonable steps to ensure that the principal places
of business, local branches, overseas branches and over-
seas representative offices of all authorized institutions and
local representative offices are operated in a responsible,
honest and business-like manner;
(c)promote and encourage proper standards of conduct and
sound and prudent business practices amongst authorized
institutions;
(d)suppress or aid in suppressing illegal, dishonourable or
improper practices in relation to the business practices of
authorized institutions;
(e)co-operate with and assist recognized banking supervisory
authorities of any place outside Hong Kong, whenever
appropriate, to the extent permitted by this or any other
Ordinance; and
consider and propose reforms of the law relating to bank-
ing business and the business of taking deposits.
(3) The Commissioner may from time to time cause to be
prepared and published by notice in the Gazette, for the guidance of
authorized institutions, guidelines not inconsistent with this Ordin-
ance, indicating the manner in which he proposes to exercise
functions conferred or imposed by this Ordinance upon him.
8. The Commissioner may authorize or employ any person to
assist him in the exercise of his functions under this Ordinance,
either generally or in any particular case.
9. (1) The Commissioner shall, as soon as practicable after
each 31 December, prepare and furnish to the Financial Secretary
for presentation to the Governor in Council a report on the working
of this Ordinance and on the activities of his office during the
preceding year and, in that report, may set out any measures that he
considers necessary for improving the working of this Ordinance
and of the activities of his office.
(2) In the report under subsection (1), the Commissioner shall
draw attention to any breach or avoidance of this Ordinance that
has come to his notice during the preceding year or any irregularity
discovered by him in the accounts and records of the financial
transactions of any authorized institution for that period which is, in
his opinion, of sufficient importance to justify him so doing.
(3) The Commissioner shall, at such times as he considers
necessary, report to the Financial Secretary on improvements that
he considers to be desirable in the operation and management of his
office.
(4) The Governor may, at any time, request the Commissioner
to report to him on any matter relating to the working of this
Ordinance or the activities of the office of the Commissioner, and the
Commissioner shall, forthwith, prepare and furnish a report to the
Governor accordingly.
(5) The Financial Secretary shall present to the Governor in
Council each report furnished to him under subsection (1) as soon as
practicable after it is so furnished.
(6) Where the Governor in Council is presented under subsec-
tion (5) with a report furnished under subsection (1) to the Financial
Secretary, the Governor in Council may, as he thinks fit, publish the
report, in whole or in part, in such manner as he thinks fit or decline
to publish any part of the report.
10. (1) The Governor may give to the Financial Secretary and
the Commissioner such directions as he thinks fit with respect to the
exercise of their respective functions under this Ordinance, either
generally or in any particular case.
(2) The Financial Secretary and the Commissioner shall, in the
exercise of their respective functions under this Ordinance, comply
with any directions given by the Governor under this section.
PART 111
BANKING BUSINESS AND BUSINESS OF TAKING DEPOSITS TO BE
CARRIED ON BY AUTHORIZED INSTITUTIONS ONLY
11. (1) No banking business shall be carried on in Hong
Kong except by a bank.
(2) Any person who and every director and every manager of a
company which contravenes this section commits an offence and is
liable-
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 5 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
12. (1) No business of taking deposits shall be carried on in Hong
Kong except by an authorized institution.
(2) A registered deposit-taking company shall not take any short-
term deposit in Hong Kong.
(3) A registered deposit-taking company shall not, without the written
permission of the Commissioner, repay any deposit within a period of
less than 3 months from the date on which the deposit was
taken by the company.
(4) No deposit-taking company shall receive money on savings
account.
(5) Subject to section 14, a licensed deposit-taking company may take or
hold short-term deposits.
(6) Any person who contravenes subsection (1), and every director
and every manager of a deposit-taking company which contravenes
subsection (2), (3) or (4) commits an offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 5 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
(7) Any person who enters into a contract or arrangement, or uses
any device or scheme, which has the effect of, or is designed to have the
effect of, avoiding subsection (1), (2), (3) or (4) commits an offence and is
liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 5 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
(8) For the purposes of any proceedings for an offence under
subsection (6), if it is proved that a person took deposits on at least 5
occasions within any period of 30 days, that person shall, until the
contrary is proved, be deemed to have been carrying on a business of
taking deposits.
13. (1) The Financial Secretary may, by notice in the Gazette, exempt
any person or class of persons from section 12(1) and, if the Financial
Secretary thinks fit, in that notice also exempt that person or class of
persons from section 92(1) in respect of the business of taking deposits
to which the exemption from section 12(1) relates. (Replaced, 64 of 1987, s.
4)
(2) An exemption under subsection (1) shall be subject to such
conditions as are specified in the notice.
(3) The Financial Secretary may at any time by notice in the Gazette
(a) revoke an exemption under subsection (1); or
(b)revoke, vary, or add to, any condition subject to which such
exemption is granted,
14. (1) Subject to subsection (2)-
(a)a registered deposit-taking company shall not take any deposit
from a depositor of a sum less than the amount specified in item
2 of the First Schedule; and
(b)a licensed deposit taking company shall not take any deposit
from a depositor of a sum less than the amount specified in item
3 of the First schedule/
(2) A deposit-taking company may take a deposit from a depositor
of a sum less than the specified sum applying at the date of that deposit
if the amount standing to the credit of the depositor with the company at
the time any such deposit is taken is not less than the specified sum
applying at the date of that deposit.
(3) Except where a depositor withdraws the whole amount standing
to his credit with a deposit-taking company the company, shall not at the
time of the withdrawal of any sum permit the amount of the balance
standing to the credit of the depositor to be less than the specified sum.
(4) Notwithstanding subsection (3), where a depositor has an amount
standing to his credit with a deposit-taking company at a time when the
specified sum is amended by being increased the company may permit the amount of
the balance to be reduced by withdrawals to any amount that is not less
than the specified sum as it was before being so amended.
(5) Every director and every manager of a deposit-taking company
which contravenes subsection (1) or (3) commits an offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
(6) Any person who holds himself out, whether as a broker or agent
of a deposit-taking company or otherwise, as being prepared to take
from any person, any sum less than the specified sum for the purpose of
making a deposit of that sum, or of that sum and other sums, with the
company commits an offence and is liable--
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
(7) Any person who enters into a contract or arrangement, or uses
any device or scheme, which has the effect of, or is designed to have the
effect of, avoiding subsection (1) or (3) commits an offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 5 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
PART IV
LICENSING AND REGISTRATION OF AUTHORIZED
INSTITUTIONS AND KEEPING OF REGISTER
15. (1) A company which wishes to carry on, or a body of persons
proposing to form a company for the purpose of carrying on, banking
business in Hong Kong shall apply to the Governor in Council, through
the Commissioner, for a banking licence or, in the case of a body of
persons proposing to form a company, for an intimation that a banking
licence will be granted to the company upon its incorporation.
(2) There shall be lodged with the Commissioner in respect of an
application for a banking licence or for an intimation that a banking
licence will be granted
(a)a copy of the charter, Ordinance (other than the Companies
Ordinance), statutes, memorandum of association and articles
of association, or other instrument, under which the company
is or is to be incorporated, which shall be verified in such
manner as the Commissioner or the Governor in Council may
require; and
(b)such other documents and information as may be required by
the Commissioner or the Governor in Council.
(3) After receiving an application for a banking licence, the
Commissioner shall forward to the Governor in Council the application
and his advice as to whether or not the applicant should be granted a
banking licence or, in the case of a proposed company, whether or not
the company upon incorporation should be granted a banking licence.
16. (1) After receiving an application forwarded under section 15
and the advice of the Commissioner in respect thereof the Governor in
Council may
(a)grant a banking licence or, in the case of a proposed company,
intimate his intention to grant a banking licence upon receipt
of notice of its incorporation;
(b)grant a banking licence subject to such conditions as he may
think proper to attach thereto in any particular case or, in the
case of a proposed company, intimate his intention, upon
receipt of notice of its incorporation, to grant a banking
licence subject to the attachment of such conditions; or
(c)without assigning any reason therefor, refuse to grant a
banking licence or, in the case of a proposed company,
intimate his intention to refuse to grant a banking licence upon
receipt of notice of its incorporation.
(2) Every director and every manager of a bank which contravenes
any condition attached under subsection (1)(b) to its banking licence
commits an offence and is liable
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
17. (1) Without limiting the generality of section 16(1)(b), the
Governor in Council may at any time, by notice in writing served upon a
bank, attach to its banking licence such conditions, or amend or cancel
any conditions attached to the banking licence, as he may think proper.
(2) Every director and every manager of a bank which contravenes
any condition attached under this section to its banking licence commits
an offence and is liable--
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
18. (1) No company which is incorporated in Hong Kong shall be
granted a banking licence unless its share capital issued and paid-up is
not less than $100,000,000 or an equivalent amount in any other approved
currency' deduction having been made in respect of a debit balance, if
any, appearing in the most recent audited profit and loss account of the
company. (Amended, 64 of 1987, s. 5)
(2) The Governor in Council may, by notice in the Gazette, amend
the amount of share capital issued and paid-up specified in subsection
(1).
19. (1) Every bank shall pay the annual banking licence fee specified
in the Second Schedule.
(2) The fee payable under this section shall be paid within 14 days
after the grant of the banking licence and thereafter upon every
anniversary of the date of its grant.(Amended, 64 of 1987, s.6)
20. (1) Every company shall, before it commences a business of taking
deposits, apply for registration in accordance with this section.
(2) There shall be lodged with the Commissioner in respect of an
application for registration
(a) a copy of the memorandum and articles of association or
other document constituting the company; and
(b) such other documents and information as may be required
by the Commissioner.
21. (1) Subject to subsection (2), the Commissioner shall, on
receipt of an application in accordance with section 20, register a company
as a registered deposit-taking company subject to such conditions as
he may think proper to attach thereto in any particular case.
(2) The Commissioner shall refuse to register a company under
subsection (1) if
(a) the paid-up share capital of the company as determined
under subsection (3), is less than $10,000,000, or an equivalent amount in
any other approved currency; (Amended, 64 of 1987, s.7)
(b)the objects of the company as stated in its memorandum or
constitution do not include the object of carrying on a business
of taking deposits;
(c) the name of the company, or the name under which the
company is carrying on or intends to carry on business in Hong
Kong, contains
(i) any word which by virtue of any Ordinance cannot
be contained in the name of any company; or
(ii) any word which by virtue of any Ordinance cannot without
consent be contained in the name of any company and in
respect of which such consent has not been given; or
(d)it appears to the Commissioner that, by reason of any circumstances
whatsoever, the company is not a fit and proper body to be
registered.
(3) For the purposes of determining the paid-up share capital of
(a) a company which has made an application for registration,
there shall be deducted from such share capital any debit
balance appearing in the most recent audited profit and
loss account lodged by the company with the application; and
(Amended, 64 of 1987, s. 7)
(b) a registered deposit-taking company, there shall be deducted from
such, share capital any debit balance appearing in the most
recent audited profit and loss
account of the company.(Amended, 64 of 1987, s. 7)
(4) The Governor in Council may, by notice in the Gazette, amend
the amount of paid-up share capital specified in subsection (2)(a).
(5) The registration of a company under subsection (1) as a registered
deposit-taking company shall be effected by entering in the register the
relevant particulars specified in section 27 and the Commissioner shall
notify the company in writing of the registration and date of registration.
(6) Where the Commissioner refuses to register a company under
subsection (2), he shall notify the company in writing of the refusal.
(7) Any company aggrieved by the refusal of the Commissioner to
register it under subsection (2), or by the imposition by him of
conditions under subsection (1), may appeal to the Governor in Council
against the refusal or the conditions but that refusal or, as the case may
be, those conditions shall take effect immediately, notwithstanding that
an appeal has been or may be made under this subsection.
(8) Every director and every manager of a deposit-taking company
which contravenes any condition attached under subsection (1) to its
registration commits an offence and is liable
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
22. (1) Without limiting the generality of section 21(1), the
Commissioner may at any time, by notice in writing served on a
registered deposit-taking company, attach to the registration of the
company such conditions, or amend or cancel any conditions attached
to the registration, as he may think proper.
(2) Any company aggrieved by any conditions to which its
registration is made subject by the Commissioner under subsection (1)
may appeal against the conditions to the Governor in Council, but those
conditions shall take effect immediately notwithstanding that an appeal
has been or may be made under this subsection.
(3) Every director and every manager of a deposit-taking company
which contravenes any condition attached under this section to its
registration commits an offence and is liable
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of S50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
23. (1) A registered deposit-taking company shall, within 14 days
after the receipt of a notice of registration under section 2 1 (5), pay to
the Director of Accounting Services the registration fee specified in the
Second Schedule.
(2) Every registered deposit-taking company shall pay to the Director of
Accounting Services annually the renewal of registration fee specified in
the Second Schedule
(a)in the case of a company which was carrying on a business of
taking deposits on 1 April 1976, on 1 April in each year; and
(Amended, 64 of 1987, s. 8)
(b)in the case of any other company, upon the anniversary of the
date of registration of such company. (Amended, 64 of 1987,
s. 8)
24. (1) Every company shall, before it commences a business of
taking deposits as a licensed deposit-taking company, apply for a
deposit-taking licence in accordance with this section.
(2) An application for a deposit-taking licence shall be made to the
Financial Secretary, through the Commissioner, and there
shall be lodged with the application such documents and information as
may be required by the Financial Secretary or the Commissioner.
(3) An application for a deposit-taking licence may be made only by a
registered deposit-taking company which has
(a) an issued share capital of not less than $100,000,000 or an
equivalent amount in any other approved currency; and
(Amended, 64 of 1987, s. 9)
(b) a paid-up share capital of not less than $75,000,000 or an
equivalent amount in any other approved currency.
(Amended, 64 of 1987, s. 9)
(4) For the purposes of determining the issued share capital or paid-
up share capital of
(a) a registered deposit-taking company which has made an
application for a deposit-taking licence, there shall be
deducted from any such share capital any debit balance
appearing in the most recent audited profit and loss account of
the company; and (Amended, 64 of 1987, s. 9)
(b) a licensed deposit-taking company, there shall be deducted
from any such share capital any debit balance appearing in the
most recent audited profit and loss account of the
company. (Amended, 64 of 1987, s. 9)
(5) The Governor in Council may, by notice in the Gazette,
amend the amount of issued share capital or paid-up share capital
specified in subsection (3).
(6) After receiving an application for a deposit-taking licence, the
Commissioner shall forward to the Financial Secretary the
application and his advice as to whether or not the applicant should be
granted a deposit-taking licence.
25. (1) After receiving an application forwarded under section 24 and
the advice of the Commissioner in respect thereof, the Financial Secretary
may
(a) grant a deposit-taking licence to a registered deposit taking
company subject to such conditions as he may think proper to
attach thereto in any particular case; or
(b) without assigning any reason therefor, refuse to grant a deposit-
taking licence.
(2) On the grant of a deposit-taking licence to a registered deposit-
taking company, the company shall cease to be a registered deposit-
taking company.
(3) Without limiting the generality of the power to attach conditions
under subsection (1)(a), the Financial Secretary may at any time, by
notice in writing served upon a licensed deposit-taking company, attach
to the deposit-taking licence held by that company such conditions, or
amend or cancel any conditions attached to the deposit-taking licence, as he
may he may think proper.
(4) Where the Financial Secretary refuses to grant a deposittaking
licence under subsection (1)(b), he shall notify the registered deposit-
taking company in writing of the refusal.
(5) Any registered deposit-taking company aggrieved by the refusal
of the Financial Secretary to grant deposit-taking licence to it under
subsection (1), or by the imposition by him of conditions under subsection
(1) or (3), may appeal to the Governor in Council against the refusal or
the conditions, but that refusal or, as the case may be, those conditions
shall take effect immediately, notwithstanding that an appeal has been or
may be made under this subsection.
(6) Every director and every manager of a licensed deposittaking
company which contravenes any condition attached under subsection
(1)(a) or (3) to its deposit-taking licence commits an offence and is liable
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
26. (1) A licensed deposit-taking company shall, within 14 days
after the grant to it of a deposit-taking licence, pay to the
Director of Accounting Services the deposit-taking licence fee specified
in the Second Schedule.
(2) Every licensed deposit-taking company shall pay to the
Director of Accounting Services annually the renewal of deposit
taking licence fee specified in the Second Schedule upon the anniversary
of the date of grant of the deposit-taking licence. (Amended, 64 qf 1987, s
10)
27. (1) The Commissioner shall maintain a register, in such form as
he thinks fit, which shall contain
(a) the name and business address of every bank;
(b) the name and business address of every local representative
office;
(c) the name and business address of every registered deposit-taking
company;
(d) the name and business address of every licensed deposit-taking company;
and
(e) such other particulars of banks, local representative
offices, registered deposit-taking companies or licensed
deposit-taking companies as the Commissioner thinks fit.
(2) The register shall be kept at the office of the Commissioner or at
such other place as may be notified by the Commissioner in the Gazette.
(3) Any member of the public may, with effect from such date and
during such hours as shall be notified by the Commissioner in the
Gazette, on payment of the fee specified in the Second Schedule--
(a)inspect the register or obtain a copy of an entry in the register
or an extract from the register; or
(b)inspect or obtain a copy of or an extract from any document
lodged with the Commissioner under section 15 (other than any
document or information referred to in subsection (2)(b) of
that section) and section 20 (other than any document or
information referred to in subsection (2)(b) of that section).
(4) A document purporting to be a copy of any entry in or extract
from the register, or of any document lodged with the Commissioner by
a company under this Ordinance, and purporting to be certified by the
Commissioner shall be admitted in evidence in criminal or civil
proceedings before any court on its production without further proof,
and
(a)until the contrary is proved, the court before which such
document is produced shall presume
(i) that the document is certified by the Commissioner;
and
(ii) that the document is a true copy of the entry in or extract
from the register, or of the document lodged with the
Commissioner, to which it refers; and
(b)such document shall be prima facie evidence of all matters
contained therein.
28. (1) Where the name of a bank, local representative office,
registered deposit-taking company or licensed deposit-taking company is
entered in the register, the Commissioner shall
publish in the GazJIte notice of such entry.
(2) Where a company ceases to be a registered deposit-taking
company by virtue of section 25(2), the Commissioner shall-
(a) remove from the register the name of the former registered deposit-
taking company; and
(b) publish in the Gazette notice of such removal.
(3) Where the licence or registration of an authorized institution is
revoked under this Ordinance, the Commissioner shall
(a) remove from the register the name of the former authorized
institution concerned; and
(b) publish in the Gazette notice of such removal.
(4) Where the registration of a registered deposit-taking com-
pany or the deposit-taking licence of a licensed deposit-taking
company is suspended under his Ordinance, the Commissioner
shall-
(a)make a notation in the register against the name of the deposit-
taking company concerned that its registration or deposit-
taking licence, as the case may be, has been so suspended and, if
such suspension is for a specified period, shall, in that notation,
give particulars of such period; and
(b) publish in the Gazette notice of such notation.
(5) Where approval for the establishment of a local representative
office is revoked under this Ordinance, the Commissioner shall
(a) remove from the register the name of the local representative
office; and
(b) publish in the Gazette notice of such removal.
(6) On the date of commencement of this Ordinance, the
Commissioner shall publish in the Gazette
(a) the name of every bank, local representative office, regis-
tered deposit-taking company and licensed deposit-taking
company entered in the register; and
(b) every notation in the register referred to in subsection (4).
PART V
REVOCATION OF LiCENCE OR REGISTRATION OF
AUTHORIZED INSTITUTION
29. The Governor in Council may revoke a banking licence-
(a) if he is satisfied that the holder of the banking licence
(i) has ceased to carry on banking business in Hong Kong;
or
(ii) proposes to make, or has made, any composition or
arrangement with its creditors or is insolvent or is being or
has been wound up or is otherwise dissolved; or
(b) if
(i) where the Commissioner has made a report to him under
section 52(1)(D); or
(ii) where the Financial Secretary has referred a report and
his recommendations thereon to the Governor in Council
under section 117(5)(c),
he considers it is in the public interest to revoke the banking
licence.
30. (1) Where the banking licence of a bank is revoked the
Commissioner shall notify the bank in writing of such revocation and the
bank shall, on and from the date specified in that notice, cease to carry
on any banking business in Hong Kong.
(2) Subsection (1) shall not prejudice the enforcement by any
person of any right or claim against the bank or by the bank of any right
or claim against any person.
31. (1) Subject to section 33(1), the Commissioner may revoke the
registration of a registered deposit-taking company if
(a) the company---
(i) has ceased to carry on a business of taking deposits; or
(ii) proposes to make, or has made, any composition or
arrangement with its creditors or is insolvent or is being or
has been wound up or is otherwise dissolved;
(b)the paid-up share capital of the company is less than the
amount specified in section 21(2)(a);
(c)the objects of the company as stated in its memorandum of
association or constitution no longer include the object of
carrying on a business of taking deposits;
(d) it appears to him that-
(i) the company is not a fit and proper body to remain registered,
(ii) the company has not provided him, whether before or
after being registered, with such information relating to it, and to
any circumstances likely to affect its method of business, as is
required by or under this Ordinance;
(iii) the chief executive of the company, with intent to defeat
or delay its creditors, has departed out of Hong Kong, or
being out of Hong Kong has remained out of Hong Kong, or
has departed from his dwelling-place or usual place of
business, or otherwise has failed or refused to attend any
meeting of the governing board, by whatever name called, of
the institution or any meeting otherwise required by or under
this Ordinance; or
(iv) the business of the company is being carried on in a
manner detrimental to the interests of its depositors;
(e) the company has contravened section 14(1) or (3);
the company has failed to pay the registration fee or renewal
of registration fee in accordance with section 23;
(g)the company has failed to comply with section 60 or Part XVII
or XVIII;
(h)the company makes a report to him under section 67 that it is
likely to become unable to meet its obligations or is about to
suspend payment or it appears to him that the company is so
unable or has suspended payment;
(i)the Financial Secretary has referred a report and his
recommendation thereon to the Commissioner under section
117(5)(e).
(2) Without limiting the generality of subsection (1), the
Commissioner may revoke the registration of a registered deposittaking
company on being requested in writing by the company to do so, if he is
satisfied that the interests of depositors of that company are adequately
safeguarded.
(3) Any company aggrieved by the revocation by the
Commissioner of its registration under subsection (1) may appeal to the
Governor in Council against the revocation, but that revocation shall
take effect immediately, notwithstanding that an appeal has been or may
be made under this subsection.
32. (1) Subject to section 33(1), the Financial Secretary may
revoke the deposit-taking licence of a licensed deposit-taking com-
pany if-
(a) the company-
(i) has ceased to carry on a business of taking deposits; or
(ii) proposes to make, or has made, any composition or
arrangement with its creditors or is insolvent or is being or
has been wound up or is otherwise dissolved;
(b) the issued share capital or paid-up share capital of the
company is less than the amount specified in section 24(3);
(c)the objects of the company as stated in its memorandum of
association or constitution no longer include the object of
carrying on a business of taking deposits,
(d)it appears to him that-
(i) the company is not a fit and proper body to remain
licensed;
(ii) the company has not provided him, whether before
or after being licensed, with such information relating to it,
and to any circumstances likely to affect its method of
business, as is required by or under this Ordinance;
(iii) the chief executive of the company, with intent to defeat
or delay its creditors, has departed out of Hong Kong, or
being out of Hong Kong has remained out of Hong Kong, or
has departed from his dwelling-place or usual place of
business, or otherwise has failed or refused to attend any
meeting of the governing board, by whatever name called, of
the institution or any meeting otherwise required by or under
this Ordinance; or
(iv) the business of the company is being carried on in a
manner detrimental to the interests of its depositors;
(e) the company has contravened section 14(1) or (3);
(f) the company has filed to pay the deposit-taking licence
fee or renewal of deposit-taking licence fee in accordance
with section 26;
(g) the company has failed to comply with section 60 or Part XVII or
XVIII;
(h)the cempany makes a report to the Commissioner under
section 67 that it is likely to become unable to meet its
obligations or is about to suspend payment or it appears to the
Financial Secretary that the company is so unable or
has suspended payment;
(i) he is of the opinion that, having regard to a report under
section 117 in respect of the company, it is proper for him
to do so.
(2) Without limiting the generality of subsection (1), the
Financial Secretary may revoke the deposit-taking licence of a
licensed deposit-taking company on being requested in writing by
the company to do so, if he is satisfied that the interests of depositors
of that company are adequateFy---safeguarded.
(3) Any company aggrieved by the revocation by the Financial
Secretary of its deposit-taking licence under subsection (1) may
appeal to the Governor in Council against the revocation, but that
revocation shall take effect immediately, notwithstanding that an
appeal has been or may be made under this subsection.
33. (1) Before exercising his powers under section 31(1) or 32(1), the
Commissioner or the Financial Secretary, as the case may be, shall inform
the deposit-taking company concerned of the grounds therefor and give
it an opportunity, within such period as the Commissioner or the
Financial Secretary, as the case may be, may specify in writing, being a
period reasonable in the circumstances, of being heard.
(2) Where the registration of a registered deposit-taking com-
pany or the deposit-taking licence of a licensed deposit-taking
company is revoked the Commissioner shall notify the company in
writing of such revocation and the company shall, on and from the
date specified in tha notice, cease to carry on a business of taking
deposits.
(3) Without prejudice to any other provision of this Ordinance, a
company referred to in subsection (2) may continue to hold until
maturity any deposit taken prior to the date referred to in that subsection.
PART VI
SUSPENSION OF DEPOSIT-TAKING
COMPANY
34. In this Part, 'the designated authority' means the Com-
missioner in the case of a registered deposit-taking company, and
the Financial Secretary in the case of a licensed deposit-taking
company.
35. (1) In any case where-
(a)the powers of the designated authority under section 31(1) or
32(1) have become exercisable with respect to a deposit-taking
company; and
(b)the designated authority considers that urgent action is
expedient,
he may, by notice in writing served on the company-
(i) suspend the registration of the company if it is a registered
deposit-taking company; or
(ii) suspend the deposit-taking licence of the company if it is a
licensed deposit-taking company,
for a period not exceeding 14 days and he may if he thinks fit, by
reason of the urgency of the matter or otherwise, do so without
giving the company an opportunity to be heard.
(2) Any notice of suspension under subsection (1) may be
accompanied by a notice stating that the designated authority is
considering whether to exercise his powers under section 31(1), 32(1) or
36.
(3) Any such accompanying notice as is mentioned in subsection
(2) shall inform the company of its rights under sections 33(1) and 37 and the
manner in which it may exercise its rights.
(4) Any suspension under this section or section 36 shall cease on
such date prior to the expiration of the period thereof as the designated
authority may, by notice in writing served on the company, determine.
36. (1) Subject to section 37, in any case where the powers of the
designated authority under section 31(1) or 32(1) have become
exercisable with respect to a deposit-taking company, the designated
authority may, by notice in writing served on the company, suspend
its registration or deposit-taking licence for a period not exceeding 6 months.
(2) A suspension under this section may, before the expiration of
the period thereof, be renewed by the designated authority
(a) by notice in writing served on the company the subject of
the suspension; and
(b)for a period not exceeding 6 months commencing immediately
upon the expiration of the suspension.
(3) Any company aggrieved by the suspension by the de-
signed authority of its registration or deposit-taking licence under
this section may appeal to the Governor in Council against the
suspension, but that suspension shall take effect immediately,
notwithstanding that an appeal has been or may be made under this
subsection.
37. Before exercising his powers under section 36, the designated
authority shall inform the deposit-taking company concerned of the
grounds therefor and give it an opportunity, within
such period as the designated authority may specify in writing, being
a period reasonable in the circumstances, of being heard.
38. (1) Without prejudice to any other provision of this
Ordinance, where the registration or deposit taking licence of a
company is suspended under section 35 or 36 the company shall, on
and from the date specified in the notification to it by the designated
authority of such suspension, cease to carry on a business of taking
deposits, until and unless the period of suspension is terminated
without revocation of the registration or deposit-taking licence of
the company and without a further period of suspension under this Part.
(2) Without prejudice to any other provision of this Ordin-
ance, a company referred to in subsection (1) may continue to hold
until maturity any deposit taken prior to the date referred to in that
subsection.
(3) Notwithstanding the suspension of the registration or
deposit-taking licence of a company it shall continue to be a
deposit-taking company for the purpose of section 23 or 26, as the
deposit-taking company for~le purposes of section 23 or 26, as the
case may be, and also of Parts VIII and IX and all the duties imposed on
a registered deposit-taking company or a licensed deposit-taking company,
as the case may be, under this Ordinance, during the period of its suspension.
PART VII
TRANSFER OF LiCENCE OR REGISTRATION OF AUTHORIZED
INSTITUTIONS
39. In this Part-
'designated authority' means-
(a)the Governor in Council in the case of an authorized institution
which is a bank;
(b)the Commissioner in the case of an authorized institution which
is a registered deposit-taking company;
(c)the Financial Secretary in the case of an authorized institution
which is a licensed deposit-taking company;
'licence' does not include a banking licence granted under section
107.
40. (1) Subject to this Ordinance, the licence or registration of an
authorized institution may be transferred from that institution to another
person.
(2) A transfer of the licence or registration of an authorized
institution shall not take effect until the designated authority grants the
transfer or until such later date as the designated authority specifies.
41. (1) The person to whom it is proposed to transfer a licence or
registration shall lodge an application for the transfer of the licence or
registration with the designated authority, which application shall, in the
case of a licence, be made through the Commissioner.
(2) Subject to such modifications as may be necessary, the
provisions of
(a)sections 15 to 19 inclusive shall apply to an application for the
transfer of a banking licence as if that application were an
application for the grant of a banking licence under section
15(1);
(b)sections 20 to 23 inclusive shall apply to an application for the
transfer of registration as if that application were an application
for registration under section 20(1);
(c)sections 24 to 26 inclusive shall apply to an application
by a registered deposit-taking company for the transfer
of a deposit-taking licence as if that application were an
application for the grant of a deposit-taking licence under
section 24(1); and(Replaced, 64 of 1987, s. 11)
(d) sections 24 to 26 inclusive shall apply to an application by
a person other than a registered deposit-taking company
for the transfer of a deposit-taking licence as if-
(i) that person were a registered deposit-taking com-
pany;and
(ii) that application were an application for the grant of a
deposit-taking
s. 11)
42. Where the designated authority grants the transfer of a licence
or of registration, the Commissioner shall
(a)issue a certificate of transfer to the applicant; and
(b)comply with such provisions of section 28 in respect of the
transfer of the licence or registration as he may think
appropriate.
43. Upon the issue of a certificate of transfer under section 42
(a)the applicant shall have and may exercise the same privileges,
and be subject to the same liabilities and penalties, under this
Ordinance as if the licence or registration transferred had been
originally granted to the applicant; and
(b)the person whose licence or registration is transferred shall
cease to be licensed or registered, but the transfer shall not
affect the liability of that or any other person for any act or
omission done, caused, permitted or made prior to the transfer.
PART VIII
LOCAL BRANCHES, LOCAL REPRESENTATIVE OFFICES
AND FEES
44. (1) An authorized institution shall not establish or maintain any
local branch thereof without the approval of the Commissioner.
(2) Subsection (1) applies to every authorized institution whether
the institution was licensed or registered before, on or after the
commencement of this Ordinance, and subsections (4) and (5) apply to
an approval granted under subsection (1) whether the approval was
granted before, on or after such commencement.
(3) Approval under subsection (1) shall be deemed to have been
granted in respect of any local branch lawfully established prior to the
commencement of this Ordinance.
(4) The Commissioner may at any time, by notice in writing served
upon an authorized institution, attach to an approval granted under
subsection (1), or deemed to have been granted under subsec-
tion (3), in respect of any local branch thereof such conditions, or
amend or cancel any conditions so attached, as he may think proper.
(5) The Commissioner may at any time revoke, in such case as
he thinks fit, an approval granted under subsection (1), or deemed to
have been granted under subsection (3), in respect of any local
branch.
(6) Where the Commissioner refuses to grant approval under
subsection (1) or revokes an approval under subsection (5), he shall
notify the authorized institution concerned in writing of the refusal
or revocation.
(7) Any authorized institution aggrieved by the refusal to
grant approval under subsection (1) or by the revocation of an
approval under subsection (5) by the Commissioner, or by any
conditions to which an approval is made subject by the Commis-
sioner under subsection (4), may appeal to the Governor in Council
against the refusal, the revocation or the conditions, but that refusal,
that revocation or, as the case may be, those conditions shall take
effect immediately, notwithstanding that an appeal has been or may
be made under this subsection.
(8) Every director and every manager of an authorized in-
stitution which contravenes subsection (1) or any condition attached
under subsection (4) commits an offence and is liable-
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
45. (1) Where the establishment by an authorized institution
of a local branch is approved under section 44, the institution shall
pay to the Director of Accounting Services the fee specified in the
Second Schedule in relation to that branch and thereafter, so long as
the branch continues to be maintained by the institution, it shall pay
to the Director of Accounting Services the fee specified in the Second
Schedule on the anniversary in each year of the date on which the
institution was licensed or registered, as the case may be.
(2) An authorized institution that is maintaining, at the com-
mencement of this Ordinance, a local branch to which section 44(3)
applies shall, so long as the branch continues to be maintained by
the institution, pay to the Director of Accounting Services the fee
specified in the Second Schedule on the anniversary in each year of
the date on which the institution was licensed or registered, as the
case may be.
46. (1) A bank incorporated outside Hong Kong which is not
licensed under section 16 and is not recognized as the central bank of
the place in which it is incorporated shall not establish or maintain
any local representative office thereof without the approval of the
Commissioner.
(2) Approval under subsection (1) shall be deemed to have
been granted in respect of any local representative office lawfully
established prior to the commencement of this Ordinance.
(3) Approval under subsection (1) shall not be granted unless
the Commissioner is satisfied that the bank is adequately supervised
by a recognized banking supervisory authority of the place in which
the bank is incorporated or established.
(4) The Commissioner may at any time, by notice in writing
served upon a bank, attach to an approval granted under subsection
(1), or deemed to have been granted under subsection (2), in respect
of any local representative office thereof such conditions, or amend
or cancel any conditions so attached, as he may think proper.
(5) The Commissioner may at any time revoke, in such case as
he thinks fit, an approval granted under subsection (1), or deemed to
have been granted under subsection (2), in respect of any local
representative office.
(6) Where the Commissioner refuses to grant approval under
subsection (1) or revokes an approval under subsection (5), he shall
notify the bank concerned in writing of the refusal or revocation.
(7) Any bank aggrieved by the refusal to grant approval under
subsection (1) or by the revocation of an approval under subsection
(5) by the Commissioner, or by any conditions to which an approval
is made subject by the Commissioner under subsection (4), may
appeal to the Governor in Council against the refusal, the revoca-
tion or the conditions, but that refusal, that revocation or, as the
case may be, those conditions shall take effect immediately, notwith-
standing that an appeal has been or may be made under this
subsection.
(8) Any person in charge, or who appears to be in charge, of a
local representative office established or maintained in contraven-
tion of subsection (1) or in respect of which any condition attached
under subsection (4) is contravened, commits an offence and is
liable-
(a), on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
47. (1) A bank incorporated outside Hong Kong which main-
tains a local representative office thereof pursuant to section 46
shall-
(a)submit to the Commissioner such information as he may
require regarding the functions and activities of the repre-
sentative office;
(b)if the Commissioner wishes to examine the functions and
activities of the representative office, for that purpose afford
to the person carrying out the examination access to the
documents maintained by the representative office and to
such information and facilities as may be required to conduct
the examination, and shall produce to the person carrying out
the examination such documents or other information as he
may require.
(2) Any person who fails to comply with any requirement of the
Commissioner under this section commits an offence and is liable
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
(3) Any person who signs any document for the purposes of this
section which he knows or reasonably ought to know to be false in a
material particular commits an offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of 550,000 and to
imprisonment for 6 months.
(4) If a bank produces any book, account, document, security or
information whatsoever under this section which is false in a material
particular, every director and every manager of the bank commits an
offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
48. (1) Where the establishment by a bank incorporated outside
Hong Kong of a local representative office is approved under section
46(1), the bank shall pay to the Director of Accounting Services the fee
specified in the Second Schedule in relation to that representative office
and thereafter, so long as the representative office continues to be
maintained by the bank, the bank shall pay to the Director of Accounting
Services the fee specified in the Second Schedule on the anniversary in
each year of the date of the grant of the approval under that section.
(2) A bank incorporated outside Hong Kong that is maintaining, at
the commencement of this Ordinance, a local representative office to
which section 46(2) applies and which representative office was
established prior to 1 April 1982 shall, so long as the representative
office continues to be maintained by the bank, pay to the Director of
Accounting Services the fee specified in the Second Schedule on 1 April
of each year.
(3) A bank incorporated outside Hong Kong that is maintaining, at
the commencement of this Ordinance, a local representative office to
which section 46(2) applies and which representative office was
established on or after 1 April 1982 shall, so long as the representative
office continues to be maintained by the bank, pay to the Director of
Accounting Services the fee specified in the Second Schedule on the
anniversary in each year of the date of the grant of approval, under
section 12C(1) of the Banking Ordinance 1964 repealed by this
Ordinance, of the establishment of that local representative office.
PART IX
OVERSEAS BRANCHES, OVERSEAS REPRESENTATIVE OFFICES
AND FEES
49. (1) Without prejudice to section 44, an authorized institution
which is incorporated in Hong Kong shall be subject to a condition that
the institution shall not establish or maintain any overseas branch or
overseas representative office thereof without the approval of the
Commissioner.
(2) Subsection (1) applies to every authorized institution
incorporated in Hong Kong whether the institution was licensed or
registered before, on or after the commencement of this Ordinance, and
subsections (4) and (5) apply to an approval granted under subsection
(1) whether the approval was granted before, on or after such
commencement.
(3) Approval under subsection (1) shall be deemed to have been
granted in respect of any overseas branch or overseas representative
office lawfully established prior to the commencement of this Ordinance.
(4) The Commissioner may at any time, by notice in writing served
upon an authorized institution, attach to an approval granted under
subsection (1), or deemed to have been granted under subsection (3), in
respect of any overseas branch or overseas representative office thereof
such conditions, or amend or cancel any conditions so attached, as he
may think proper.
(5) The Commissioner may at any time revoke, in such case as he
thinks fit, an approval granted under subsection (1), or deemed to have
been granted under subsection (3), in respect of any overseas branch or
overseas representative office.
(6) Where the Commissioner refuses to grant approval under
subsection (1) or revokes an approval under subsection (5), he shall
notify the authorized institution concerned in writing of the refusal or
revocation.
(7) Any authorized institution aggrieved by the refusal to grant
approval under subsection (1) or by the revocation of an approval under
subsection (5) by the Commissioner, or by any conditions to which an
approval is made subject by the Commis
sioner under subsection (4), may appeal to the Governor in Council
against the refusal, the revocation or the conditions, but that refusal,
that revocation or, as the case may be, those conditions shall take effect
immediately, notwithstanding that an appeal has been or may be made
under this subsection.
(8) Every director and every manager of an authorized institution
which contravenes the condition in subsection (1) or any condition
attached under subsection (4) commits an offence and is liable
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
50. (1) Every authorized institution incorporated in Hong Kong
which maintains an overseas branch thereof shall be subject to a
condition that
(a)the institution shall submit to the Commissioner a return in
such form, and at such intervals, as he may specify showing
the assets and liabilities of the overseas branch;
(b)the institution shall submit to the Commissioner such further
information as he may consider necessary for the proper
understanding of the functions and activities of the overseas
branch, and that such information shall be submitted within
such period and in such manner as the Commissioner may
require;
(c)if the Commissioner requires any return submitted to him
pursuant to paragraph (a), or any information submitted to him
pursuant to a requirement under paragraph (b), to be
accompanied by a certificate of an auditor, the institution shall
submit a certificate of the auditor appointed under section
59(1) or of the auditors appointed under section 59(1) and (2),
as the case may be, as to whether or not, in the opinion of the
auditor or auditors, the return or information is correctly
compiled from the books and records of the overseas branch;
(d)if the Commissioner wishes to examine the books, accounts
and transactions of the overseas branch, the institution shall
for that purpose afford the person carrying out the
examination at the place where the branch is maintained
access to the books and accounts of the branch, to
documents of title to the assets and other documents and to
all securities held by the branch in respect of its customers'
transactions and its cash and to such information and facilities
as may be required to conduct the examination, and that the
institution shall produce to the
person carrying out the examination such books, accounts,
documents, securities, cash or other information as he may
require:
Provided that, so far as is consistent with the conduct of
the examination, such books, accounts, documents, securities
and cash shall not be required to be produced at such times
and such places as shall interfere with the proper conduct of
the normal daily business of the overseas branch.
(2) Every authorized institution incorporated in Hong Kong which
maintains an overseas representative office thereof shall be subject to a
condition that
(a)the institution shall submit to the Commissioner such
information as he may require regarding the functions and
activities of the overseas representative office;
(b)if the Commissioner wishes to examine the functions and
activities of the overseas representative office, the institution
shall for that purpose afford the person carrying out the
examination at the place where the representative office is
maintained access to the documents maintained by the
representative office and to such information and facilities as
may be required to conduct the examination, and that the
institution shall produce to the person carrying out the
examination such documents or other information as he may
require.
(3) This section applies to every authorized institution incorporated
in Hong Kong whether the institution was licensed or registered before,
on or after the commencement of this Ordinance.
(4) Every director and every manager of an authorized institution
which contravenes any condition in subsection (1) or (2), or fails to
comply with any requirement under those subsections, commits an
offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 12 months; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
(5) If an authorized institution produces any book, account.
document, security or information whatsoever under this section which
is false in a material particular, every director and every manager of the
institution commits an offence and is liable-
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
(6) Any person who signs any document for the purposes of this
section which he knows or reasonably ought to know to be false in a
material particular commits an offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
51. (1) Whenever the establishment by an authorized institution
incorporated in Hong Kong of an overseas branch or overseas
representative office is approved under section 49(1), the institution
shall pay to the Director of Accounting Services the fee specified in the
Second Schedule in relation to that branch or representative office and
thereafter, so long as the branch or representative office continues to be
maintained by the institution, it shall pay to the Director of Accounting
Services the fee specified in the Second Schedule on the anniversary in
each year of the date on which the institution was licensed or registered,
as the case may be.
(2) An authorized institution incorporated in Hong Kong that is
maintaining, at the commencement of this Ordinance, an overseas
branch or overseas representative office to which section 49(3) applies
shall, so long as the branch or representative office continues to be
maintained by the institution, pay to the Director of Accounting
Services the fee specified in the Second Schedule on the anniversary in
each year of the date on which the institution was licensed or registered,
as the case may be.
PART X
POWERS OF CONTROL OVER AUTHORIZED INSTITUTIONS
52. (1) Where-
(a) an authorized institution informs the Commissioner-
(i) that it is likely to become unable to meet its obligations;
or
(ii) that it is insolvent or about to suspend payment;
(b)an authorized institution becomes unable to meet its
obligations or suspends payment;
(c)after an examination or investigation is made under section 55,
the Commissioner is of the opinion that an authorized
institution
(i) is carrying on its business in a manner detrimental to the
interests of its depositors or of its creditors;
(ii) is insolvent or is likely to become unable to meet its
obligations or is about to suspend payment;
(iii) has contravened or failed to comply with any of the
provisions of this Ordinance; or
(iv) has contravened or failed to comply with any condition
attached to its licence or registration, the condition specified
in section 49(1), the condition specified in section 50(1) or the
condition specified in section 50(2); or
(d)the Financial Secretary advises the Commissioner that he
considers it in the public interest to do so,
the Commissioner, after consultation with the Financial Secretary, may
exercise such one or more of the following powers as may from time to
time appear to him to be necessary
(A)to require the institution forthwith to take any action or to do
any act or thing whatsoever in relation to its business as he
may consider necessary;
(B)to appoint a person to advise the institution in the proper
conduct of its business;
(C)to assume control of and carry on the business of the
institution, or direct some other person to assume control of
and carry on the business of the institution;
(D) to report the circumstances to the Governor in Council.
(2) Except in the circumstances specified in subsection (1)(a), the
Commissioner shall not exercise the power conferred by subsection
(1)(D) unless he has given to the authorized institution not less than 7
days' notice in writing of his intention to exercise such power and a
statement in writing of his reasons for the exercise thereof, and has
afforded the institution an opportunity to submit to him representations
in writing thereon, and any such representations shall form part of his
report to the Governor in Council.
(3) Any person aggrieved by the exercise by the Commissioner of
any of the powers conferred on him by subsection (1)(A), (B) and (C)
may appeal to the Governor in Council against the exercise of those
powers, but that exercise of those powers shall take effect immediately,
notwithstanding that an appeal has been or may be made under this
subsection.
(4) Every director and every manager of an authorized institution
which fails to comply with any requirement of the Commissioner under
subsection (1)(A) commits an offence and is liable
(a)on conviction upon indictment to a fine of 51,000,000 and to
imprisonment for 5 years and, in the case of a continuing
offence, to a further fine of $50,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
53. (1) Where-
(a)the Commissioner makes a report to the Governor in Council
under section 52(1)(D);
(b)any person appeals to the Governor in Council under section
52(3); or
(c)the Financial Secretary refers a report and his
recommendations thereon to the Governor in Council under
section 11 7(5)(c),
the Governor in Council may, without prejudice to the powers conferred
on him, the Commissioner or the Financial Secretary, as the case may be,
by section 29(b), 31(1)(i) or 32(1)(i) or Part VI, exercise one or more of the
following powers
(i)to confirm, vary or reverse any requirement, appointment or
direction made by the Commissioner;
(ii)to make such order as he may think fit in relation to the affairs
of the authorized institution and exercise any power which the
Commissioner may exercise under section 52(1);
(iii) to direct the Financial Secretary to present a petition to the
High Court for the winding-up of the authorized institution or
former authorized institution by the High Court.
(2) The Governor in Council may, before considering any report or
appeal under subsection (1), seek the advice of the Banking Advisory
Committee or the Deposit-taking Companies Advisory Committee, or
both, but shall not be bound to follow any such advice.
(3) Every director and every manager of an authorized institution
which fails to comply with an order of the Governor in Council under
subsection (1)(ii) commits an offence and is liable--
(a)on conviction upon indictment to a fine of $1,000,000 and to
imprisonment for 5 years and, in the case of a continuing
offence, to a further fine of $50,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
54. (1) The Commissioner, after consultation with the Financial
Secretary, may at any time, whether or not the appointment of such
person has terminated, fix the remuneration and expenses to be paid by
an authorized institution to any person appointed by the Commissioner
under section 52(1) or by the Governor in Council under section 53(1) to
advise the institution in the proper conduct of its business.
(2) Where the Commissioner has assumed control of the business
of an authorized institution under section 52(1)(C) or pursuant to an
order of the Governor in Council under section 53(1)(ii) or some other
person has assumed control of the business of
an authorized institution pursuant to a direction under section
52(1)(C) or an order of the Governor in Council under section
53(1)(ii), the Commissioner, after consultation with the Financial
Secretary, may at any time, whether or not he or such other person
has ceased to be in control of the business of the institution, fix the
remuneration and expenses to be paid by the institution to him, and
to any person employed or authorized by him under section 8 to
assist him in the control of and the carrying on of the business of the
institution, or to such other person, as the case may be.
(3) Any authorized institution aggrieved by a decision of the
Commissioner under subsection (1) or (2) may appeal to the
Governor in Council against the decision.
55. (1) Without limiting the generality of section 52, the
Commissioner may at any time, with or without prior notice to the
authorized institution, examine the books, accounts and transac-
tions of any authorized institution and, in the case of an authorized
institution incorporated in Hong Kong, any local branch, overseas
branch, overseas representative office or subsidiary, whether local or
overseas, of such institution.
(2) Without limiting the generality of section 52, the Commis-
sioner shall investigate the books, accounts and transactions of an
authorized institution-
(a)if shareholders of the institution holding not less than
one-third of the total number of issued shares in the
institution, or depositors holding not less than one-tenth of
the gross amount of the total deposit liabilities in Hong
Kong of the institution or a sum equal to the aggregate of
the paid-up share capital of the institution and its pub-
lished reserve, whichever is the greater, apply to him to
make such an investigation and submit to him such evi-
dence as he considers necessary to justify the investigation
and furnish such security for the payment of the costs of
the investigation as he may require; or
(b)if the institution suspends payment or informs him of its
intention to suspend payment.
(3) Where an investigation is made by the Commissioner
pursuant to subsection (2), the Financial Secretary may order that
all expenses incurred in such investigation shall be defrayed---
(a) by the authorized institution; or
(b)if the investigation was made pursuant to subsection (2)(a),
either wholly by the persons who applied for the making of
the investigation or partly by the authorized institution in
such proportions as he considers to be just.
56. (1) For the purposes of an examination or investigation
under section 55, an authorized institution and, in the case of
an authorized institution incorporated in Hong Kong, any local
branch, overseas branch, overseas representative office or sub-
sidiary, whether local or overseas, of such institution shall afford the
person carrying out the examination or investigation access to its books
and accounts, to documents of title to its assets and other documents,
to all securities held by it in respect of its customers' transactions and its
cash and to such information and facilities as may be required to
conduct the examination or investigation, and shall produce to the
person carrying out the examination or investigation such books,
accounts, documents, securities, cash or other information as he may
require:
Provided that, so far as is consistent with the conduct of the
examination or investigation, such books, accounts, documents,
securities and cash shall not be required to be produced at such times
and such places as shall interfere with the proper conduct of the normal
daily business of the institution, local branch, overseas branch,
overseas representative office or subsidiary. as the case may be.
(Amended, 64 of 1987, s. 12)
(2) Every director and every manager of an authorized institution
which, without reasonable excuse, contravenes this section (which
contravention shall include a contravention by any of the institution's
local branches, overseas branches, overseas representative offices or
subsidiaries) commits an offence and is liable(Amended, 64 of 1987, s.
12)
(a)on conviction upon indictment to a fine of $100.000 and to
imprisonment for 12 months; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
(3) If any authorized institution or any local branch, overseas
branch, overseas representative office or subsidiary of the institution
produces any book, account, document, security or information
whatsoever under this section which is false in a material particular.
every director and every manager of the institution commits an offence
and is liable- (Amended, 64 of 1987, s. 12)
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
57. (1) Where the Commissioner has assumed control of the
business of an authorized institution under section 52(1)(C) or pursuant
to an order of the Governor in Council under section 53(1)(ii) or some
other person has assumed control of the business of an authorized
institution pursuant to a direction under section 52(1)(C) or an order of
the Governor in Council under section 53(1)(ii). then, subject to
subsection (2), the Commissioner or such other person, as the case may
be, shall remain in control and continue to carry on the business of that
institution in the name and
on behalf of the institution until it is no longer necessary, in the
opinion of the Financial Secretary, for the Commissioner or such
other person to remain in control of the institution.
(2) Where the Commissioner has assumed control of the
business of an authorized institution under section 52(1)(C) or
pursuant to an order of the Governor in Council under section
53(1)(ii) or some other person has assumed control of the business of
an authorized institution pursuant to a direction under section
52(1)(C) or an order of the Governor in Council under section
53(1)(ii), the Governor in Council, upon the application of the
institution, may, if he is satisfied that it is no longer necessary for the
protection of the depositors of the institution that the Commissioner
or such other person should remain in control of the business of the
institution, order that the Commissioner or such other person shall
cease to control the business of the institution as from a date
specified in the order.
(3) Where the Commissioner has assumed control of the
business of an authorized institution under section 52(1)(C) or
pursuant to an order of the Governor in Council under section
53(1)(ii) or some other person has assumed control of the business of
an authorized institution pursuant to a direction under section
52(1)(C) or an order of the Governor in Council under section
53(1)(ii) or any such control has been relinquished pursuant to any
of the provisions of this section, the Financial Secretary shall cause
to be published in the Gazette a notification of the fact of the
assumption or cessation of such control, as the case may be.
58. (1) Where the Commissioner has assumed control of the
business of an authorized institution under section 52(1)(C) or
pursuant to an order of the Governor in Council under section
53(1)(ii), or some other person has assumed control of the business
of an authorized institution pursuant to a direction under section
52(1)(C) or an order of the Governor in Council under section
53(1)(ii), the institution shall submit its business to the control of the
Commissioner or such other person and shall provide him with the
services of such members of its staff and such other facilities as he
may consider necessary for carrying on the business of the institu-
tion and in connection therewith the directors and managers shall
comply with and carry out any directions which the Commissioner
or such other person may give to them.
(2) Without limiting the generality of subsection (1), where by
reason of the absence of directors or for any reason whatsoever the
seal of an authorized institution whose business is-
(a)in the control of the Commissioner under section 52(1)(C)
or pursuant to an order of the Governor in Council under
section 53(1)(ii); or
(b)in the control of some other person pursuant to a direction
under section 52(1)(C) or an order of the Governor in
Council under section 53(1)(ii),
cannot be affixed to an instrument in accordance with the institution's
articles of association or regulations, the seal may be affixed in the
presence of, and its affixing may be attested by, the Commissioner or
such other person or a person authorized for the purpose by the
Commissioner or such other person.
(3) Where the seal of an authorized institution has been affixed to
an instrument, and the affixing thereof has been attested, in accordance
with subsection (2), no person shall be concerned to see that the seal
could not be affixed in accordance with the institution's articles of
association or regulations.
(4) Every director and every manager-
(a)of an authorized institution which contravenes subsection (1);
or
(b)who fails without reasonable excuse to comply with or to carry
out any direction given by the Commissioner or some other
person under subsection (1),
commits an offence and is liable-
(i)on conviction upon indictment to a fine of $1,000,000 and to
imprisonment for 5 years and, in the case of a continuing
offence, to a further fine of $50,000 for every day during which
the offence continues; or
(ii)on summary conviction to a fine of $50,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
PART XI
AUDITS AND MEETINGS
59. (1) Every authorized institution which is a company, and
its auditors, shall comply with the Companies Ordinance with
respect to the audit of a company's accounts, whether or not the
institution is incorporated under that Ordinance.
(2) The Commissioner may, after consultation with the authorized
institution, appoint another auditor to act in addition to the auditor
appointed by the institution in accordance with the Companies
Ordinance or, in the case of an authorized institution which is an
unincorporated bank, section 110.
(3) The Commissioner may at any time, whether or not the
appointment of such person has terminated, fix the remuneration and
expenses to be paid by an authorized institution to any auditor
appointed by the Commissioner under subsection (2).
(4) Any authorized institution aggrieved by a decision of the
Commissioner under subsection (3) may appeal to the Governor in
Council against the decision.
(5) Every director and every manager of an authorized institution
which contravenes subsection (1) commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
60. (1) Every authorized institution shall, not later than 6 months
after the close of each financial year, publish in one English language
daily newspaper and one Chinese language daily newspaper, each of
which shall be a newspaper circulating in Hong Kong
(a)a copy of its audited annual balance sheet for that year, and
any notes thereon, a copy of the profit and loss account and a
copy of the report of the auditor made pursuant to section 141
of the Companies Ordinance or section 110 of this Ordinance.,
(b)the full and correct names of all persons who are directors or
managers for the time being of the institution; and
(c)the names of all subsidiaries, for the time being, of the
institution,
and shall thereafter exhibit them throughout the year in a conspicuous
position in the principal place of business of the institution in Hong
Kong and in each local branch, together with, in the case of an
authorized institution which is a company limited by shares or limited by
guarantee and having a share capital, a copy of the report of the
directors laid before the company in general meeting in accordance with
section 129D(1) of the Companies Ordinance.
(2) A copy of each of the documents referred to in subsection (1)
shall be lodged with the Commissioner by an authorized institution, prior
to first exhibition thereof under subsection (1), with a list of the names of
all companies of which, for the time being, its directors are also directors.
(3) If, in the case of an authorized institution incorporated outside
Hong Kong, the Commissioner is satisfied that a report has been duly
made by an auditor, or any person exercising a similar function in
accordance with the law of the place in which the institution is
incorporated, upon the annual balance sheet and accounts of the
institution and a copy of such report and the report of the directors of
such institution is sent to the Commissioner, he may by notice in writing
exempt any such institution from this section and section 59(1) subject
to such conditions as he may think proper to attach thereto.
(4) The Commissioner may require any authorized institution to
submit such further information as he may think necessary for the
proper understanding of the balance sheet and profit and loss
accounts sent by that institution under subsection (2); and such
information shall be submitted within such period and in such manner as
the Commissioner may require.
(5) The annual balance sheet of an authorized institution, copies of
which are required by subsection (1) to be exhibited, shall be in such
form as the Commissioner may approve.
(6) Every director and every manager of an authorized institution
which contravenes subsection (1), (2), (3) or (5) commits an offence and
is liable
(a) on conviction upon indictment to a fine of $200,000; or
(b) on summary conviction to a fine of $50,000,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
(7) Every director and every manager of an authorized institution
which fails without reasonable excuse to comply with any requirement
under subsection (4) commits an offence and is liable on conviction
upon indictment or on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing offence, to a
further fine of $2,500 for every day during which the offence continues.
61. (1) The directors of an authorized institution, any auditor of the
institution, including an auditor appointed under section 59(2), or any
other auditor who has acted for the institution for any period not earlier
than 9 months before the date of the notice, or the Commissioner,
may, by notice in writing to the other parties mentioned herein, request a
meeting to discuss matters relating to the institution.
(2) Any meeting to he held in pursuance of a notice under
subsection (1) may proceed notwithstanding the non-attendance of not more
than one of the parties served with that notice.
62. Notwithstanding any other provision of this Ordinance or the
Professional Accountants Ordinance, the Commissioner may, where he
is of the opinion that there are grounds for a complaint under section 34
of that Ordinance in respect of any auditor of an authorized institution,
including an auditor appointed under section 59(2) or approved under
section 63(3)(b), make such complaint to the Registrar under that
Ordinance
PART XII
DISCLOSURE OF INFORMATION BY AUTHORIZED INSTITUTIONS
63. (1) Every authorized institution shall submit to the
Cornmissioner
(a)not later than 14 days after the last day of each calendar
month a return showing the assets and liabilities of its
principal place of business in Hong Kong and all local
branches thereof at the close of business on the last business
day of that month; and
(b)not later than 14 days after the last day of each quarter ending
on 31 March, 30 June, 30 September and 31 December
respectively, or upon any other day which may be approved
by the Commissioner, a return relating to its principal place of
business in Hong Kong and all local branches thereof as at
the close of business on the last business day of the
preceding quarter:
Provided that the Commissioner may by permission in writing allow
the returns referred to in paragraphs (a) and (b) to be submitted at less
frequent intervals.
(2) The Commissioner may require an authorized institution to
submit such further information as he may consider necessary for the
proper understanding of the financial position of the institution
and such information shall be submitted within such period and in
such manner as the Commissioner may require.
(3) The Commissioner may require any return submitted to him
pursuant to subsection (1), or any information submitted to him
pursuant to a requirement under subsection (2), to be accompanied by a
certificate
(a) of the auditor appointed under section 59(1) or of the auditors
appointed under section 59(1) and (2), as the case may be; and
(b) in the case of an authorized institution which has been
exempted under section 60(3) from section 59(1), of an auditor
approved by the Commissioner for the purposes of this
paragraph, (Amended, 64 of 1987, s. 13)
as to all or any of the following-
(i) whether or not, in the opinion of the auditor or auditors, the
return or information is correctly compiled from the books or
records of the institution and, if not correctly compiled, the
nature and extent of the incorrectness;
(ii) whether or not, during the period to which the return or
information relates, there appears to the auditor or auditors to
be any contravention by the institution of any of its duties
under Part XII, XIV, XV, XVII or XVIII of this Ordinance,
and, if it so appears, the nature of the contravention and the
evidence therefor;
(iii) whether or not, during the period to which the return or
information relates, there was any matter which, in the opinion
of the auditor or auditors, adversely affects the financial
position of the institution to a material extent, and if there was,
the nature of the matter and the reason why the auditors are of
that opinion.
(4) Notwithstanding section 120, the Commissioner may prepare
and publish consolidated statements aggregating the figures in the
returns furnished under subsection (1).
(5) Every director and every manager of an authorized institution
which contravenes subsection (1), or fails to comply with any
requirement under subsection (3), commits an offence and is liable on
conviction upon indictment or on summary conviction to a fine of
$50,000 and, in the case of a continuing offence, to a further fine of
$5,000 for every day during which the offence continues.
(6) Every director and every manager of an authorized institution
which fails without reasonable excuse to comply with any requirement
under subsection (2) commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
(7) Any person who signs any document for the purposes of this
section which he knows or reasonably ought to know to be false in a
material particular commits an offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
64. (1) Every authorized institution
incorporation
KONG shall, if so required by the Commissioner, inform him of the name
and address of, and the nature of the business carried on by, every
company
(a)in which the institution holds the beneficial ownership,
directly or indirectly, of an aggregate of 20 per cent or more of
the share capital;
(b)where any director or manager of that company is also a
director or manager of the institution;
(c)where the name of that company has common features with
the name of the institution;
(d)which, by whatever means, acts in concert with the institution
to promote the institution's business; or
(e)the controller of which is also the controller of the institution.
(2) The Commissioner may require any authorized institution which
has submitted to him information pursuant to subsection (1) to submit to
him such further information as he may consider necessary to Obtain, in
the interests of depositors of the institution about the assets, liabilities
and transactions of any such company.
(3) Information that is required to be submitted under this section
shall be submitted within such period and in such manner as the
Commissioner may require.
(4) Every director and every manager of an authorized institution
which fails without reasonable excuse to comply with any requirement
under this section commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
(5) Any person who signs any document for the purposes of this
section which he knows or reasonably ought to know to be false in a
material particular commits an offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
(6) If an authorized institution produces any book, account,
document, security or information under this section which is false in a
material particular, every director and every manager of the institution
commits an offence and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
65. (1) An authorized institution, within 30 days after the making of
any alteration to the memorandum of association, articles of association
or other instrument under which it is incorporated, shall furnish to the
Commissioner particulars of such alteration in writing, verified by a
director of the institution.
(2) Every director and every manager of an authorized institution
which contravenes this section commits an offence and is liable on
conviction upon indictment or on summary conviction to a fine of
$50,000 and, in the case of a continuing offence, to a further fine of
$5,000 for every day during which the offence continues.
66. (1) An authorized institution which ceases to carry on the
business of taking deposits or, as the case may be, banking business,
shall forthwith notify the Commissioner in writing of that fact.
(2) Every director and every manager of an authorized institution
which fails to comply with this section commits an offence and is liable
on conviction upon indictment or on summary conviction to a fine of
$10,000.
67. (1) If any authorized institution is likely to become unable to
meet its obligations or if it is about to suspend payment it shall forthwith
report all relevant facts, circumstances and information to the
Commissioner.
(2) Every director and every manager of an authorized institution
which fails without reasonable excuse to comply with subsection (1)
commits an offence and is liable--
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
68. The appropriate recognized banking supervisory authority of a
place outside Hong Kong may, with the approval of the Commissioner,
examine the books, accounts and transactions of the principal place of
business in Hong Kong or any local branch, or the documents of any
local representative office
(a)of an authorized institution which is incorporated in that
place; or
(b)of an authorized institution which is incorporated in or outside
Hong Kong and is a subsidiary of a bank or other body
corporate which is incorporated in that place.
PART XIII
OWNERSHIP AND MANAGEMENT OF AUTHORIZED
INSTITUTIONS
69. (1) An authorized institution incorporated in Hong Kong shall
not in the case of an authorized institution which is a bank or
licensed deposit-taking company, without the prior approval in writing
of the Financial Secretary, and in the case of an authorized institution
which is a registered deposit-taking company, without the prior
approval of the Commissioner
(a)make any arrangement or enter into any agreement for the sale
or disposal of all or any part of
(i) in the case of a bank, its banking business; and
(ii) in the case of a deposit-taking company, its business of
taking deposits; or
(b) make any reconstruction of its capital to reduce such capital.
(2) An authorized institution incorporated in Hong Kong which
(a)makes any arrangement or enters into any agreement for the
sale or disposal of all or any part of its business, irrespective
of whether the arrangement or agreement is pursuant to an
approval under subsection (1)(a); or
(b)makes any reconstruction of its capital, irrespective of whether
the reconstruction is pursuant to an approval under
subsection (1)(b),
shall give notice in writing of the arrangement, agreement or
reconstruction, as the case may be, to the Commissioner as soon as
practicable after making that arrangement, entering into that agreement
or making that reconstruction, and
(i)the notice shall be signed by a director of the institution; and
(ii)the institution shall provide the Commissioner with such
information in respect of that arrangement, agreement or
reconstruction as he may require.
(3) An authorized institution aggrieved by a decision of the
Financial Secretary or the Commissioner refusing his approval for the
purposes of subsection (1) may appeal to the Governor in Council
against the decision, but the decision shall take effect immediately,
notwithstanding that an appeal has been or may be made under this
subsection.
(4) Every director and every manager of an authorized institution
which contravenes subsection (1) commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
(5) Every director and every manager of an authorized institution
which contravenes subsection (2) commits an offence and is liable on
conviction upon indictment or on summary conviction to a fine of
$50,000 and, in the case of a continuing offence, to a further fine of
55,000 for every day during which the offence continues.
(6) If an authorized institution produces any information
whatsoever under this section which is false in a material particular,
every director and every manager of the institution commits an offence
and is liable
(a)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to impri-
sonment for 6 months.
(Replaced, 64 of 1987, s. 14)
70. (1) Subject to subsection (2), a person who, after the
commencement of this Ordinance, becomes, by whatever means and
whether alone or in concert with others, entitled to exercise or
control the exercise of 10 per cent or more of the voting power at any
general meeting of an authorized institution incorporated in Hong
Kong, shall not exercise such of that voting power which he has
acquired after that commencement unless he has made an applica-
tion to the Commissioner for the Commissioner's approval to
exercise such of that voting power he has so acquired and has
received such approval, which approval may be given in a general or
a particular case, shall be conveyed to the applicant as soon as
practicable, and shall be subject to such conditions as the Com-
missioner may think proper to attach thereto.
(2) Subsection (1) shall not apply to voting power acquired by
any person after the commencement of this Ordinance where the
voting power was so acquired in pursuance of an agreement entered
into before that commencement.
(3) Where a person has acquired voting power in respect of an
authorized institution such that the person is subject to subsection
(1), the institution shall forthwith inform the Commissioner of the
name of that person.
(4) Where the Commissioner refuses to give an approval
under subsection (1), he shall notify the person and authorized
institution concerned in writing of his refusal as soon as practicable.
(5) Any person aggrieved by the refusal to grant approval
under subsection (1) by the Commissioner or the imposition of
conditions by him under that subsection may appeal to the Gover-
nor in Council against the refusal or conditions, but that refusal or,
as the case may be, those conditions shall take effect. immediately,
notwithstanding that an appeal has been or may be made under this
subsection.
(6) Nothing done in contravention of subsection (1), or in
reliance on the exercise in contravention of that subsection of any
voting power, shall be invalid by reason only of that contravention.
(7) Any person who contravenes subsection (1) commits an
offence and is liable-
(a)on conviction upon indictment to a fine of 5500,000 and to
imprisonment for 5 years; or
(b)on summary conviction to a fine of $50,000 and to impri-
sonment for 6 months.
(8) Every director and every manager of an authorized institu-
tion which fails to comply with subsection (3) commits an offence
and is liable-
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to impri-
sonment for 6 months.
71. (1) No person shall-
(a)become the chief executive of an authorized institution, or
a director or secretary of an authorized institution in-
corporated in Hong Kong, without the consent in writing
of the Commissioner; or (Replaced, 64 of 1987, s. 15)
(b)if he becomes such chief executive, director or secretary
without such consent, act or continue to act as such chief
executive, director or secretary, as the case may be, without
such consent, (Replaced, 64 of 1987, s. 15)
and for the purposes of this subsection consent may be given subject
to such conditions as the Commissioner may think proper to attach
thereto and shall be conveyed to the person, and the institution,
concerned as soon as practicable.
(2) Where the Commissioner refuses to give consent under
subsection (1), he shall notify the person concerned in writing of his
refusal as soon as practicable.
(3) The Commissioner may by notice in writing to the person
and the authorized institution concerned withdraw any consent
given under subsection (1), or amend any condition attached to any
such consent, if the Commissioner-
(a)has given to the chief executive, director or secretary
concerned not less than 7 days' advance notice of his
intention to do so, specifying his reasons; and
(b)has taken into account before so doing any written repre-
sentation received by him from the chief executive, director
or secretary concerned,
and in any such case the chief executive, director or secretary
concerned shall cease to act as such or, as the case may be, shall
comply with the amended conditions. (Amended, 64 of 1987, s. 15)
(4) A person aggrieved-
(a)by a refusal to grant consent, or by conditions attached to
a consent, under subsection (1);
(b) by the withdrawal of consent under subsection (3); or
(e)by the amendment under subsection (3) of conditions
attached to a consent,
may appeal to the Governor in Council against the refusal, condi-
tions, withdrawal or amendment, as the case may be, but such
refusal, conditions, withdrawal or amendment shall take effect
immediately notwithstanding that an appeal has been or may be
made under this subsection.(Amended, 64 of 1987, s. 15)
(5) Any person who contravenes subsection (1) or (3) commits an
offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to impri-
sonment for 6 months,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
(6)(a) A person shall not be regarded for the purposes of
subsection (1) as becoming a director of an authorized
institution if he is appointed to serve as a director of it
immediately on the expiration of a previous term by him as a
director.
(b)A person who is a director or secretary of an authorized
institution immediately prior to the commencement of this
Ordinance shall for the purposes of this section be regarded as
having the consent of the Commissioner under subsection (1)
to continue to act as director or secretary, as the case may be.
(c)A person who is the chief executive of an authorized
institution immediately prior to the commencement of the
Banking (Amendment) Ordinance 1987 shall for the purposes
of this section be regarded as having the consent of the
Commissioner under subsection (1) to continue to act as chief
executive. (Added, 64 of 1987, s. 15)
(7) For the purposes of this section, where a person has the consent
of the Commissioner under subsection (1) or by virtue of subsection
(6)(c) to be or continue to act as the chief executive of an authorized
institution, and is such chief executive, he is not required to have the
consent of the Commissioner under subsection (1) to be or continue to
act as a director or secretary, as the case may be, of that institution.
(Added, 64 of 1987, s. 15)
72. (1) Any person who is a controller of an authorized institution
incorporated in Hong Kong, irrespective of whether he became such
controller before, on or after the commencement of this Ordinance, shall
not, as such controller, give any directions or instructions to the
directors of the institution
(a)in the case of a person who became such controller before or
on the commencement of this Ordinance, after the expiration of
3 months after that commencement or such further period as
the Commissioner may allow in any particular case; and
(b)in the case of a person who becomes such controller after the
commencement of this Ordinance, at any time after he has
become such controller,
unless he has made an application to the Commissioner for the
Commissioner's approval to give such directions and instructions
and has received such approval, which approval may be given in a
general or a particular case, shall be conveyed to the applicant and to
the institution concemed as soon as practicable in writing, and shall be
subject to such conditions as the Commissioner may think proper to
attach thereto.
(2) Where the Commissioner refuses to give an approval under
subsection (1), he shall notify the person and authorized institution
concerned in writing of his refusal as soon as practicable.
(3) Any person aggrieved by the refusal by the Commissioner to
grant approval under subsection (1), or by the imposition by the
Commissioner of conditions under that subsection, may appeal to the
Governor in Council against the refusal or the conditions but that refusal
or, as the case may be, those conditions shall take effect immediately,
notwithstanding that an appeal has been or may be made under this
subsection.
(4) Any person who contravenes subsection (1) commits an offence
and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
73. (1) No person who-
(a)is bankrupt or has entered into a composition with his
creditors;
(b)has been convicted in any place of an offence involving fraud
or dishonesty; or
(c)has been a director, or otherwise concerned in the
management, of any authorized institution which has been
wound up by a court or whose licence or registration, as the
case may be, has been revoked,
shall, without the consent in writing of the Commissioner, become an
employee of an authorized institution or, if becoming such an employee
without such consent, act, or continue to act, as such employee.
(2) Any person who contravenes this section commits an offence
and is liable
(a)on conviction upon indictment to a fine of 100,000 and to
imprisonment for 12 months; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
74. (1) Every authorized institution shall appoint a chief executive of
the institution who shall be
(a) an individual; and
(b) ordinarily resident in Hong Kong,
except that, in the case of an authorized institution incorporated outside
Hong Kong, such chief executive is only required to be the chief
executive in respect of the business in Hong Kong of the institution.
(2) Every director and every manager of an authorized institution
which contravenes subsection (1) commits an offence and is liable on
conviction upon indictment or on summary conviction to a fine of
$50,000 and, in the case of a continuing offence, to a further fine of
$5,000 for every day which the offence continues.
PART XIV
SHARE CAPITAL, RESERVE AND DIVIDEND OF AUTHORIZED
INSTITUTIONS
75. (1) Every bank incorporated in Hong Kong shall, before any
dividend is declared, appropriate to its reserve out of the profit of each
year, after due provision has been made for taxation
(a) a sum equal to not less than one-third of such profit; or
(b)such lesser sum, if any, as may be necessary so that the
aggregate of the bank's paid-up share capital and its reserve is
not less than $200,000,000 or an equivalent amount in any other
approved currency. (Amended, 64 of 1987, s. 16)
(2) Every deposit-taking company which is incorporated in
Hong Kong shall, before any dividend is declared, appropriate to
reserve out of the profit of each year, after due provision has been made
for taxation
(a) a sum equal to not less than one-third of such profit; or
(b) such lesser sum, if any, as may be necessary so that-
(i) in the case of a registered deposit-taking company,
the aggregate of the company's paid-up share capital and
its reserve is not less than $20,000,000 or an equivalent
amount in any other approved currency; and
(ii) in the case of a licensed deposit-taking company,
the aggregate of the company's paid-up share capital and
its reserve is not less than $150,000,000 or an equivalent
amount in any other approved currency. (Amended 64
of 1987, s. 16)
(3) No deposit-taking company incorporated in Hong Kong
shall pay any dividend out of the profits of a year previous to the
year in respect of which the dividend is declared unless the aggregate
of the company's paid-up share capital and reserve after such
payment will be-
(a) not less than $20,000,000 or an equivalent amount in any
other approved currency in the case of a registered deposit-
taking company. and
(b) not less than $150,000,000 or an equivalent amount in any
other approved currency in the case of a licensed deposit-taking
company. (Amended, 64 of 1987, s. 16)
(4) Every director and every manager of a bank which contravenes
subsection (1), and of a deposit-taking company which contravenes
subsection (2) or (3), commits an offence and is liable-
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
76. (1) Every authorized institution shall at all times maintain
adequate provision
(a)for its bad and doubtful debts, if any; and
(b)against the diminution, if any, of the value of its assets, or the
materializing of its contingent liabilities.
(2) Every director and every manager of an authorized institution
which contravenes this section commits an offence and is liable-
(a)on conviction upon indictment to a fine of S200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
77. (1) A bank incorporated in Hong Kong shall not carry on
banking business in Hong Kong unless its share capital issued and
paid-up is not less than $100,000,000 or an equivalent amount in any
other approved currency, deduction having been made in respect of a debit
balance, if any, appearing in the most recent audited annual accounts of
the bank. (Amended, 64 of 1987, s. 17)
(2) Every director and every manager of a bank which contravenes
this section commits an offence and is liable on conviction upon
indictment to a fine of $500,000 and to imprisonment for 5 years and, in
the case of a continuing offence, to a further fine of $25,000 for every
day during which the offence continues.
78. (1) A bank that is incorporated in Hong Kong shall not
distribute any extraordinary profits unless the aggregate of its paid-up
share capital and reserves after such distribution will be not less than
$200,000,000 or an equivalent amount in any other approved currency.
(Amended, 64 of 1987, s. 18)
(2) A deposit-taking company that is incorporated in Hong
Kong shall not distribute any extraordinary profits unless the aggregate
of its paid-up share capital and reserves after such distribution will be
not less than-
(a) $20,000,000 or an equivalent amount in any other
approved currency in the case of a registered deposit-
taking company; and
(b) $150,000,000 or an equivalent amount in any other
approved currency in the case of a licensed deposit taking
company. (Amended, 64 of 1987, s. 18)
(3) Every director and every manager of a bank which contravenes
subsection (1), and of a deposit-taking company which contravenes
subsection (2), commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
PART XV
LIMITATIONS ON LOANS BY AND INTERESTS OF AUTHORIZED
INSTITUTIONS
79. (1) In this Part-
'non-listed company' means a company not listed on the Unified
Exchange:
Provided that any public statutory corporation designated for
the purposes of this definition by the Financial Secretary by notice
in the Gazette shall be deemed not to be a non-listed company;
'relative' means
(a)any ascendant or descendant, any spouse or former spouse of
any such ascendant or descendant, and any parent, brother or
sister of any such spouse or former spouse;
(b)any brother or sister, aunt or uncle and any nephew or niece;
(c)any spouse or former spouse, any ascendant of any such
spouse or former spouse, and any brother or sister, aunt or
uncle or nephew or niece of any such spouse or former
spouse,
and, for the purposes of this definition, any step-child shall be
deemed to be the child of both its natural parent and of its step-
parent and any adopted child to be the child of the adopting parent,
and a spouse shall include anyone living as such;
'reserves' in relation to any authorized institution means reserves which
appear in the accounts of the institution, and does not include any
reserves which are represented by the writing down of the value of
assets or by provision for the depreciation of fixed assets;
'value' means-
(a)in the case of shares in a company other than a trust
company registered under Part VIII of the Trustee Ordin-
ance, the total of the current book value and the amount
for the time being remaining unpaid on the shares; and
(b) in any other case, the current book value.
(2) In determining the paid-up capital and reserves of an
authorized institution for the purposes of this Part, there shall be
deducted any loss disclosed in the most recent balance sheet of the
institution lodged with the Commissioner under section 60(2).
(3) For the purposes of sections 83, 84 and 85, 'unsecured'
means granted without security, or, in respect of any advance, loan
or credit facility granted or financial guarantee or other liability
incurred with security, any part thereof which at any time exceeds
the market value of assets constituting that security; and 'Security'
means such security as would, in the opinion of the Commissioner,
be acceptable to a prudent banker.
(4) Subject to paragraph (a) of the proviso to section 81(2), in
relation to any authorized institution that is incorporated outside
Hong Kong, this Part shall apply, save for the purpose of deter-
mining the paid-up capital or reserves of the institution, only to its
principal place of business in Hong Kong and its local branches, and
shall do so as if that principal place of business and those branches
were collectively a separate authorized institution. (Amended, 64
of 1987, s. 19)
80. (1) An authorized institution shall not grant any ad-
vances, loans or credit facilities, including irrevocable documentary
letters of credit to the extent to which they are not covered by
marginal cash deposits, or give any financial guarantee or incur any
other liability, against the security of its own shares.
(2) An authorized institution shall not, except with the ap-
proval in writing of the Commissioner, which approval shall be
subject to such conditions as the Commissioner may think proper to
attach thereto, grant any advances, loans or credit facilities, in-
cluding irrevocable documentary letters of credit to the extent to
which they are not covered by marginal cash deposits, or give any
financial guarantee or incur any other liability, against the security
of the shares of-
(a) any holding company of the institution;
(b) any subsidiary of the institution; or
(c)any other subsidiary of any holding company of the
institution.
(3) Every director and every manager of an authorized institu-
tion which contravenes subsection (1) or (2) commits an offence and
is liable-
(a)on conviction upon indictment to a fine of $100,000 and to
imprisonment for 12 months; or
(b)on summary conviction to a fine of $50.000 and to
imprisonment for 6 months.
81. (1) The financial exposure of an authorized institution to
(a) any one person;
(b) two or more companies which-
(i) are subsidiaries of the same holding company; or
(ii) have the same controller (not being a company);
(c)any holding company and one or more of its subsidiaries; or
(d)any one person (not being a company) and one or more
companies of which that person is the controller,
shall not exceed an amount equivalent to 25 per cent of the paid-up
capital and reserves of the institution.
(2) The financial exposure of an authorized institution to any such
person, company or combination thereof as is referred to in subsection
(1)(a), (b), (c) or (d), shall for the purposes of this section be taken to
be the aggregate of-
(a)all advances by the authorized institution to; and
(b)the value of the authorized institution's holdings of shares and
debentures (within the meaning of those terms in section 2 of
the Companies Ordinance) and other debt securities as defined
in paragraph 1 of the Third Schedule issued by, (Amended, 64
of 1987, s. 20)
that person, company or combination:
Provided that this section shall not apply to
(a)transactions between authorized institutions, for which
purpose section 79(4) shall not apply to any such authorized
institution that is incorporated outside Hong Kong;
(Replaced, 64 of 1987, s. 20)
(b)transactions to the extent to which they are covered by a form
of guarantee acceptable to the Commissioner;
(e)an authorized institution the liabilities of which are assured by
a letter of comfort accepted by the Commissioner under
subsection (3) or (4), so long as the institution conforms with
any limitation on the aggregate amount of any investments and
advances which the institution may make, being a limitation
imposed by the Commissioner under subsection (5)(a) or (7)
or by the terms of a letter of comfort;
(d)the purchase of bills of exchange or documents of title to
goods where the holder of such bills or documents is entitled
to payment outside Hong Kong for goods exported from Hong
Kong;
(e)any advances made against any bills or documents referred to
in paragraph (d); (Replaced, 64 of 1987, s. 20)
(f)any financial exposure to the Government; (Replaced, 64
of 1984, s. 20.)
(g)any financial exposure to any eligible, Government as defined in
paragraph 1 of the Third Schedule; or (Replaced, 64 of 1987, s. 20)
(h)transactions between an authorized institution and a bank
incorporated outside Hong Kong which is not licensed under
this Ordinance where any such bank is, in the opinion of the
Commissioner, adequately supervised by a banking
supervisory authority in its place of incorporation.
(3) The Commissioner may, for the purposes of paragraph (c) of the
proviso to subsection (2), where the authorized institution is a bank,
accept a letter of comfort if that letter of comfort
(a) is given by another bank which-
(i) is a shareholder in the bank for the benefit of which the
letter of comfort is given;
(ii) controls any body corporate which is a shareholder in
the bank for the benefit of which the letter of comfort is given;
or
(iii) is a bank controlled by a body corporate which is either
a shareholder in the bank for the benefit of which the letter of
comfort is given or controls any body corporate which is a
shareholder in that bank; or
(b)is given by another bank incorporated in Hong Kong, or by a
bank incorporated outside Hong Kong which is not licensed
under this Ordinance but is, in the opinion of the
Commissioner, adequately supervised by a banking
supervisory authority in its place of incorporation; and
(c)has been given pursuant to a resolution of the board of
directors of the other bank and with the knowledge of the
banking supervisory authority of the place where the other
bank is incorporated.
(4) The Commissioner may, for the purposes of paragraph (c) of the
proviso to subsection (2), where the authorized institution is a deposit-
taking company accept a letter of comfort if that letter of comfort
(a) is given by a bank which-
(i) is a shareholder in the deposit-taking company;
(ii) controls any body corporate which is a shareholder in
the deposit-taking company; or
(iii) is a bank controlled by a body corporate which is either
a shareholder in the deposit-taking company or
controls any body corporate which is a shareholder in the
deposit-taking company; or
(b)is given by a bank incorporated in Hong Kong, or by a bank
incorporated outside Hong Kong which is not licensed under
this Ordinance but is, in the opinion of the Commissioner,
adequately supervised by a banking supervisory authority
in its place of incorporation; and
(c)has been given pursuant to a resolution of the board of
directors of the bank and with the knowledge of the banking
supervisory authority of the place where the bank is
incorporated.
(5) In accepting any letter of comfort under subsection (3) or (4) the
Commissioner-
(a)shall limit the aggregate amount of any advances and
investments which the authorized institution concerned may
make, grant or incur to such aggregate amount as he may in his
discretion specify, (but subject, however, to any direction
given him by the Financial Secretary under subsection (6))
and, without limiting the generality of such discretion, such
amount may be determined
(i) in relation to the paid-up capital and reserves of the bank
giving the letter of comfort as determined by reference to any
accounts furnished to the Commissioner by the bank either at
the time when the letter of comfort is submitted to the
Commissioner for his determination, or subsequently;
(ii) having regard to-
(A)the extent of the beneficial shareholding of the bank
giving the letter of comfort in the authorized
institution for the benefit of which it is given where
subsection (3)(a)(i) or (4)(a)(i), as the case may be,
applies;
(B)the extent of any beneficial shareholding relevant in
determining control for the purposes of subsection
(3)(a)(ii) or (iii) or (4)(a)(ii) or (iii), as the case may be;
(C)the paid-up capital and reserves of the authorized
institution for the benefit of which the letter of
comfort is given;
(D)the laws and practices applicable to the transactions
of the bank giving the letter of comfort;
(b)may require the bank giving the letter of comfort to submit, at
such intervals as the Commissioner may determine, such
accounts as he may specify,
and in notifying such acceptance to the authorized institution for the
benefit of which the letter of comfort is given he shall also notify it of
the limit imposed under paragraph (a) and any requirement under
paragraph (b).
(6) The Financial Secretary may at any time direct the Commissioner
either generally or in any particular case as to the limits to be imposed in
the exercise of his functions under subsection (5)(a) and it shall be the
duty of the Commissioner to comply with any such direction.
(7) The Commissioner may at any time, by notice to an authorized
institution, the liabilities of which are assured by a letter of comfort
accepted by the Commissioner under subsection (3) or (4), as the case
may be--
(a)where any limit has been specified for the purposes of
subsection (5)(a) or any requirement imposed under
subsection (5)(b), specify a new limit or vary such a
requirement; but he shall not impose a more restrictive limit
unless he is of the opinion that
(i) the institution has failed to comply with such limit or
requirement; or
(ii) it is in the interests of depositors so to do; or
(b)where any such limit has not been so specified or such a
requirement imposed, specify such limit or impose such
requirement,
and the provisions of subsection (3) or (4), as the case may be, shall
apply in relation to the exercise of the powers of the Commissioner
under this subsection as they do in relation to the exercise of his
powers under subsection (3) or (4), as the case may be.
(8) Notwithstanding subsection (1), where the aggregate amount of
any advances and investments immediately prior
(a)to the specification of any new limit under subsection (7) did
not exceed, the amount previously specified;
(b)to the imposition of a limit under subsection (5) or (7) did not
exceed the aggregate amount then permissible under this
section; or
(c)to the withdrawal by the bank giving a letter of comfort
accepted by the Commissioner under subsection (3) or (4), as
the case may be, did not exceed the aggregate amount
permissible by this section,
and immediately after such specification or withdrawal did exceed the
amount permissible under this section, the authorized institution may
(i) permit any advances included in computing such aggregate to
be outstanding until the maturity thereof, or until they may
lawfully be terminated without penalty to the institution, as
the case may be; and
(ii)retain any investments included in computing such aggre-
gate, for a period of not more than 3 months, or such
longer period as may be approved by the Commissioner in
writing in any particular case, from the date of the specifi-
cation of the new limit, the imposition of the limit or, as
the case may be, the withdrawal of the bank referred to in
paragraph (e):
Provided that, in either case, no new advances or investments
which are to be included in computing such aggregate are granted,
incurred or made while the amount permissible under this section is
so exceeded.
(9) No letter of comfort accepted by the Commissioner under
subsection (3) or (4) in accordance with his powers under this section
shall authorize any advances or investments which exceed in aggre-
gate any limitations on such aggregate amount assured in the letter
of comfort.
(10) For the purposes of this section-
(a)the expression 'person' includes any partnership, any
public body and any body of persons, corporate or unin-
corporate;
(b) the expression 'advances' shall include-
(i) any kind of advance, loan, (whether by way of
deposit or otherwise) or credit facility, including an ir-
revocable letter of credit to the extent to which it is not
covered by a marginal cash deposit, given by an authorized
institution; and
(ii) any financial guarantee given, or liability incurred,
by an authorized institution;
(e)the expression 'investments' shall mean any such holding
by an authorized institution as is referred to in subsection
(2)(b);
(d)advances, loans, facilities, guarantees or liabilities shall be
deemed to be granted to and to be outstanding in relation
to any person liable or contingently liable thereon whether
as principal debtor, guarantor, or otherwise:
Provided that the reference in this paragraph to a
guarantor shall not include a person (not being an author-
ized institution) who guarantees the obligations of another
under-
(i) a hire purchase agreement, that is to say an agree-
ment for the bailment of goods under which the bailee may
buy the goods, or under which the property in the goods
will or may pass to the bailee; or
(ii) a conditional sale agreement, that is to say an
agreement for the sale of goods under which the purchase
price or part of it is payable by instalments, and the
property in the goods is to remain in the seller (notwith-
standing that the buyer is to be in possession of the goods)
until such conditions as to payment of instalments or
otherwise as may be specified in the agreement are fulfilled;
and
(e)the expression 'letter of comfort' means a letter of com-
fort whether or not it is enforceable at law.
(11) Every director and every manager of an authorized institu-
tion which contravenes subsection (1) commits an offence and is
liable-
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during
which the offence continues; or
(b)on summary conviction to a fine of $50,000 and to impri-
sonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during
which the offence continues.
(12) Any document purporting to be certified by the Commis-
sioner as a true copy of any accounts, being accounts of the nature
referred to in subsection (5), shall be admissible in evidence in any
proceedings arising out of a contravention or alleged contravention
of subsection (1) as truth of the matters stated in those accounts.
82. (1) Without prejudice to section 7(3) or to the other
provisions of this Part, the Commissioner may, after consultation
with the Financial Secretary, by notice in the Gazette from time to
time publish for the guidance of authorized institutions, guidelines,
not inconsistent with this Ordinance, specifying business practices
which should not be engaged in by authorized institutions because,
in his opinion, such business practices will or may cause the
soundness of the financial position of authorized institutions to be
dependent upon the soundness of the financial position of a single
party.
(2) For the purposes of subsection (1), guidelines given in a
notice under that subsection-
(a)may be expressed to apply to all authorized institutions or
to a class of authorized institutions specified in the notice;
and
(b)may specify what constitutes a single party for the
purposes of any such guidelines and, without prejudice to
the generality of that power, any class or description of
persons or business may constitute such a single party.
(3) Where an authorized institution engages in business prac-
tices specified in a notice under subsection (1), the Governor in
Council, the Financial Secretary or the Commissioner, as the case
may be, may, where he is of the opinion that the case is of sufficient
importance to justify him so doing, exercise any of his powers under
Part V, VI or X in respect of the institution.
83. (1) Subject to subsection (4A), a bank shall not grant any
facility specified in subsection (3) to or on behalf of any person or
body specified in subsection (4) if the aggregate amount of such
facilities for the time being granted by that bank to or on behalf of
any one or more such persons or bodies would thereby exceed 10 per
cent of the paid-up capital and reserves of the bank. (Amended, 64
of 1987, s. 21)
(2) Subject to subsection (1), a bank shall not grant any facility
specified in subsection (3) to or on behalf of any person specified in
subsection (4)(a), (b), (c), (d), (e) or (f) if the aggregate amount of such
facilities for the time being granted by that bank to or on behalf of that
person would thereby exceed $250,000.
(3) For the purposes of subsections (1) and (2), the following
facilities are specified-
(a) the granting, or permitting to be outstanding, of unsecured
advances, unsecured loans or unsecured credit facilities
including unsecured irrevocable documentary letters of credit;
(b) the giving of unsecured financial guarantees; and
(c) the incurring of any other unsecured liability.
(4) For the purposes of subsections (1) and (2), the following
persons and bodies are specified
(a)any director of the bank;
(b)any relative of any such director;
(c)any employee of the bank who is responsible, either
individually or as a member of a committee, for determining
loan applications;
(d) any relative of any such employee;
(e)any controller (other than an authorized institution, or a bank
incorporated outside Hong Kong which is not licensed under
this Ordinance but is approved by the Commissioner for the
purposes of this paragraph) of the bank; (Replaced, 64 of
1987, s. 21)
(f) any relative of an individual who is a controller of the bank;
(g)any firm, partnership or non-listed company (other than a firm,
partnership or non-listed company which is an authorized
institution, or a bank incorporated outside Hong Kong which
is not licensed under this Ordinance but is approved by the
Commissioner for the purposes of this paragraph) in which the
bank or any of its directors or any relative of any of its
directors is interested as director, partner, manager or agent;
and
(h)any individual, firm, partnership or non-listed company of
which any director of the bank or any relative of any such
director is a guarantor.
(4A) The Commissioner may, by notice in writing to a bank, and
subject to such conditions as he may think proper to attach thereto in
any particular case, permit the bank to grant, without complying with
subsection (1), any facility specified in subsection (3) (or such of those
facilities as he specifies in the notice) to or on behalf of any person or
body specified in subsection (4)(g) (or such of those persons or bodies
as he specifies in the notice); and where the bank, in pursuance of such
notice and in accordance with such conditions, grants any such facility
to or on behalf of any s h person or body it shall not thereby contravene
subsection (1) (Added, 64 of 1987, s.21)
(5) The provisions of this section shall apply to a facility granted to
or on behalf of a person or body jointly with another person or body as
they apply to a facility granted to or on behalf of a person or body
severally.
(6) For the purposes of subsections (2) and (4), a facility granted to
or on behalf of any firm, partnership or non-listed company which a
person specified in subsection (4)(a), (b), (c), (d), (e) or (f) is able to
control, shall be deemed to be granted to that person or on his behalf.
(7) Every director and every manager of a bank which contravenes
subsection (1) or (2) commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
84. (1) Subject to subsection (6A), a licensed deposit-taking
company shall not grant any facility specified in subsection (3) to or
on behalf of any person or body specified in subsection (6)(g) or (h)
if the aggregate amount of such facilities for the time being granted
by the licensed deposit taking company to or on behalf of any one or
more such persons or bodies would thereby exceed 10 per cent of the
paid-up capital and reserves of the licensed deposit-taking company.
(Amended, 64 of 1987, s. 22)
(2) A licensed deposit-taking company shall not grant any facility
specified in subsection (3) to or on half of any person specified in
subsection (6)(a), (b), (c), (d), (e) or (f).
(3) For the purposes of subsections (1) and (2), the following
facilities are specified
(a)the granting, or permitting to be outstanding, of unsecured
advances, unsecured loans or unsecured credit facilities
including unsecured irrevocable documentary letters of credit;
(b) the giving of unsecured financial guarantees; and
(c) the incurring of any other unsecured liability.
(4) Subject to subsection (6B), a registered deposit-taking company
shall not grant any of the following facilities to or on behalf of any
person specified in subsection (6)- (Amended, 64 of 1987,s.22)
(a)the granting, or permitting to be outstanding, of advances,
loans or credit facilities including irrevocable documentary
letters of credit;
(b) the giving of financial guarantees; and
(c) the incurring of any other liability.
(5) Nothing in subsection (4) shall prohibit the granting of-
(a)any of the facilities specified in that subsection where the
facility is fully secured by a licensed bank or by a bank
incorporated outside Hong Kong which is not licensed under
this Ordinance and which is a shareholder in the deposit-
taking company; or
(b)a secured loan to an employee of the deposit-taking company
for the purchase by him of a private residence for himself or his
family if no such loan by the deposit-taking company is
outstanding to such employee in relation to any other
residence.
(6) For the purposes of subsections (1), (2) and (4), the following
persons and bodies are specified
(a) any director of the deposit-taking company;
(b) any relative of any such director;
(c)any employee of the deposit-taking company who is
responsible, either individually or as a member of a
committee, for determining loan applications;
(d)any relative of any such employee;
(e)any controller (other than an authorized institution, or a bank
incorporated outside Hong Kong which is not licensed under
this Ordinance but is approved by the Commissioner for the
purposes of this paragraph) of the deposit-taking company;
(Replaced, 64 of 1987, s. 22)
(f)any relative of an individual who is a controller of the
deposit-taking company
(g) any firm, partnership or non-listed company (other than a
firm, partnership or non-listed company which is an auth-
orized institution, or a bank incorporated outside Hong
Kong which is not licensed under this Ordinance but is
approved by the Commissioner for the purposes of this
paragraph) in which the deposit-taking company or any of
its directors or any relative of any of its directors is
interested as director, partner, manager or agent; and
(h)any individual, firm, partnership or non-listed company of
which any director of the deposit-taking company or any
relative of any such director is a guarantor.
(6A) The Commissioner may, by notice in writing to a licensed deposit-taking
company, and subject to such conditions as he may think proper to
attach thereto in any particular case, permit the company to grant, without complying
with subsection (1) any facility specified in subsection (3) (or such of those
facilities as he specifies in the notice) to or on behalf of any person or body
specified in subsection (6)(g) (or such of those persons or bodies as
he specifies in the notice); and where the company, in pursuance of
such notice and in accordance with such conditions, grants any such
facility to or on behalf of any such person or body it shall not thereby
contravene subsection (1) (Added, 64 of 1987, s. 22)
(6B) The Commissioner may, by notice in writing to a registered
deposit-taking company, and subject to such conditions as he may think
proper to attach thereto in any particular case, permit the company to
grant any of the facilities specified in subsection (4)(a), (b) or (e) (or such
of those facilities as he specifies in the notice) to or on behalf of any
person or body specified in subsection (6)(g) (or such of those persons
or bodies as he specifies in the notice); and where the company, in
pursuance of such notice and in accordance with such conditions grants
any such facility to or on behalf of any such person or body it shall not
thereby contravene subsection (4). (Added, 64 of 1987, s. 22)
(7) The provisions of this section shall apply to a facility granted to
or on behalf of a person or body jointly with another person or body as
they apply to a facility granted to or on behalf of a person or body
severally.
(8) For the purposes of subsections (2) and (6), a facility granted to
or on behalf of any firm, partnership or non-listed company which a
person specified in subsection (6)(a), (b), (c), (d), (e) or (f) is able to
control, shall be deemed to be granted to that person or on his behalf.
(9) Every director and every manager of a deposit-taking company which
contravenes subsection (1), (2) or (4) commits an offence and is
liable-
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
85. (1) An authorized institution shall not grant to any one of
its employees any facility specified in subsection (2) to an aggregate
amount of such facilities in excess of one year's salary for the
employee.
(2) For the purposes of subsection (1) the following facilities
are specified-
(a)the granting, or permitting to be outstanding, of unsecured
advances, unsecured loans or unsecured credit facilities
including unsecured irrevocable documentary letters of
credit;
(b)the giving of unsecured financial guarantees; and
(c)the incurring of any other unsecured liability.
(3) Every director and every manager of an authorized institu-
tion which contravenes this section commits an offence and is
liable-
(a)on conviction upon indictment to a fine of $100,000 and to
imprisonment for 12 months; or
(b)on summary conviction to a fine of $50,000 and to impri-
sonment for 6 months,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
86.(1) Where the Commissioner-
(a)has reason to believe that an authorized institution has
granted to any foreign bank any advances, loans (whether
by way of deposit or otherwise) or credit facilities; and
(b)is of the opinion that the extent or manner in which such
advances, loans or credit facilities have been made is not in
the interests of the depositors of the authorized institution,
he may, by notice in writing to the institution, exercise his powers
under this section.
(2)A notice under this section may-
(a)prohibit the authorized institution from granting, after the
date of the service of the notice. any advances, loans or
credit facilities to the foreign bank specified in the notice
and any other foreign bank so specified which the Com-
missioner has reason to believe is associated with the
first-mentioned foreign bank;
(b)where any moneys are held at call, demand or notice by the
authorized institution with any bank specified by the
Commissioner in pursuance of his powers under para-
graph (a), direct the institution forthwith to demand repay-
ment of such moneys in accordance with the terms upon
which they are held;
(c)prohibit the authorized institution from permitting to be
outstanding with any bank specified by the Commissioner
in pursuance of his powers under paragraph (a)-
(i) any moneys which should have been repaid to the
institution by virtue of a direction under paragraph (b);
(ii) any advances, loans or credit facilities repayable or
terminable upon the elapse of any time or the occurrence
of any event, after the elapse of such time or the occurrence
of such event.
(3) A requirement under subsection (2)(a) shall not prohibit
the grant of any advance or loan after the date of service of the
notice in pursuance of any agreement entered into prior to such date
unless the Commissioner otherwise directs; but it shall be the duty of
the authorized institution to notify the Commissioner of any rele-
vant agreement within 7 days of the receipt by it of a notice under
this section.
(4) In this section---
'foreign bank' means-
(a)any bank incorporated outside Hong Kong which is not
licensed under this Ordinance;
(b)any undertaking of an authorized institution, including
that of the institution to which notice is given under this
section, which is situated outside Hong Kong.
(5) Every director and every manager of an authorized institu-
tion which fails without reasonable excuse to comply with any
requirement of the Commissioner in the exercise of his powers under
this section commits an offence and is liable-
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during
which the offence continues; or
(b)on summary conviction to a fine of $50,000 and to impri-
sonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during
which the offence continues.
87. (1) Subject to subsection (2), an authorized institution
shall not acquire or hold any part of the share capital of any other
company or companies to an aggregate value in excess of 25 per cent
of the paid-up capital and reserves of the institution, except such
share capital as the institution may hold as security for facilities
granted by it or acquire in the course of the satisfaction of debts due
to it: (Amended, 64 of 1987, s. 23)
Provided that all share capital acquired in the course of the
satisfaction of debts due to it shall be disposed of at the earliest
suitable opportunity, and in any event not later than 18 months after
the acquisition thereof or within such further period as the Commis-
sioner approves in writing in any particular case.
(2) Subsection (1) shall not apply-
(a)where an authorized institution acquires or holds any part of
the share capital of any company or companies under an
underwriting or subunderwriting contract for a period not
exceeding 3 months, or such further period as the
Commissioner approves in writing in any particular case; or
(b)to any holding, approved in writing by the Commissioner, of
share capital in
(i) another authorized institution; or
(ii) a subsidiary formed by the authorized institution
concerned for the carrying out of nominee, executor or trustee
functions, or of other functions incidental to banking business
or to the business of taking deposits.
(3) Every director and every manager of an authorized institution
which contravenes this section commits an offence and is liable--
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
(4) In this section, 'share capital' includes perpetual subordinated
debt.
88. (1) An authorized institution shall not purchase or hold any
interest or interests in land situated in or outside Hong Kong of a value
or to an aggregate value, as the case may be, in excess of 25 per cent of
the paid-up capital and reserves of the institution.
(2) Subject to subsection (4), an authorized institution may, in
addition to the value of any land permitted to be purchased or held
under subsection (1), purchase or hold interests in land situated in or
outside Hong Kong to any value, where the occupation of such land is,
in the opinion of the Commissioner, necessary for conducting the
business of the institution or providing housing or amenities for the
staff of the institution.
(3) For the purposes of subsection (2), but without limiting the
generality thereof, the Commissioner may in his discretion regard as
necessary for conducting the business of an authorized institution the
whole of any premises in which an office of the institution is situated.
(4) The aggregate value of interests in land purchased or held by a
deposit-taking company under subsections (1) and (2) shall not exceed
the aggregate amount of the paid-up capital and reserves of the deposit-
taking company.
(5) There shall not be taken into account in the assessment of the
value of interests in land for the purposes of this section the value of
any interest in land mortgaged to the authorized institution to secure a
debt due to the institution nor the value of any interest in land acquired
pursuant to entry into possession of land so mortgaged, provided that
the interest acquired is disposed of at the earliest suitable opportunity,
and in any event not later than 18 months after its acquisition or within
such further period as the Commissioner may, in writing, allow in any
particular case.
(6) Every director and every manager of an authorized institution
which contravenes this section commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
89. In the case of a registered deposit-taking company,
notwithstanding anything contained in sections 87 and 88. the
aggregate value of
(a)share capital acquired or held under section 87(1); and
(b)interests in land purchased or held under section 88(1) or (2),
shall not exceed the aggregate amount of its paid-up capital and
reserves.
90. (1) In the case of a bank, notwithstanding anything contained in
sections 83, 87 and 88
(a)the aggregate total of-
(i) the amount outstanding of all facilities specified in
section 83(3) granted to or on behalf of persons or bodies
specified in section 83(4);
(ii) the value of all holdings of share capital specified in
section 87; and
(iii) the value of all holdings of interests in land specified in
section 88(1),
shall not at any time exceed 55 per cent of the paid-up capital
and reserves of a bank; and
(b)the aggregate total of-
(i) the amount outstanding of all facilities specified in
section 83(3) granted to or on behalf of persons or bodies
specified in section 83(4);
(ii) the value of all holdings of share capital specified in
section 87; and
(iii) the value of all holdings of interests in land specified in
section 88(1) and (2),
shall not at any time exceed 80 per cent of the paid-up capital
and reserves of a bank.
(2) In assessing the aggregate total which is permissible under
subsection (1) there shall not be taken into account any matter which is
excluded from the operation of section 83, 87 or 88 by virtue of any of
the provisions thereof or of section 79(2).
(3) Every director and every manager of a bank which contravenes
this section commits an offence and is liable
(a)on conviction upon indictment to a fine of 5200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
91. (1) Any authorized institution, if at any time called upon in
writing by the Commissioner so to do, shall satisfy him by the
production of such evidence or information as he may require, that
(a)in the case of an authorized institution which is a bank, the
bank is not in contravention of any of the provisions of section
81, 83, 87, 88 or 90; and
(b)in the case of an authorized institution which is a deposit-
taking company, the deposit-taking company is not in
contravention of any of the provisions of section 81, 84, 87,
88 or 89.
(2) Any authorized institution, if at any time called upon in writing
by the Commissioner so to do, shall satisfy him by the production of
such evidence or information as he may require, whether or not the
institution is engaging in any business practices specified in a notice
under section 82.
(3) Every director and every manager of an authorized institution
which fails or refuses without reasonable excuse to comply with
subsection (1) or (2) commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of 55,000 for every day during which
the offence continues.
PART XVI
ADVERTISEMENTS, REPRESENTATIONS AND
USE OF
TITLE 'BANK'
92. (1) Subject to subsection (5), no person shall-
(a)issue, or have in his possession for the purposes of issue, any
advertisement which to his knowledge is or contains an
invitation to members of the public
(i) to make any deposit; or
(ii) to enter into, or offer to enter into, any agreement to
make any deposit;
(b)issue, or have in his possession for the purposes of issue, any
document which to his knowledge contains such an
advertisement; or
(c)in any other manner issue or make an invitation to members of
the public to do any of the acts referred to in paragraph (a).
(2) Any person who contravenes subsection (1) commits an
offence and is liable on conviction upon indictment or on summary
conviction to a fine of $10,000.
(3) For the purposes of any proceedings under this section, an
advertisement or document in which a person named in the
advertisement or document holds himself out as being prepared to take
in Hong Kong any deposit shall, subject to subsection (4), be presumed,
unless such named person proves to the contrary, to have been issued
by him.
(4) A person shall not be taken to contravene this section by
reason only that he issues, or has in his possession for the purposes of
issue, to purchasers copies of any newspaper, magazine, journal or other
periodical publication of general and regular circulation, which contain
an advertisement to which this section applies.
(5) This section shall not apply to-
(a)any advertisement or invitation to make a deposit or to enter
into, or offer to enter into, any agreement to make a deposit
with an authorized institution; or (Amended, 64 of 1987, s.
24)
(b)any advertisement or invitation, or any document containing
any advertisement or invitation, to which section 4(1) of the
Protection of Investors Ordinance would, but for section
4(2)(g) of that Ordinance, apply.
(6) Where any advertisement or invitation, or any document
containing any advertisement or invitation, relates to the taking of
any deposit and the taking of any such deposit is not, by virtue of
section 3(1) or (2), a taking to which Part 111 applies then, to the
extent that such advertisement, invitation or document, as the case
may be, relates to the taking of any such deposit, this section shall
not apply to such advertisement, invitation or document, as the case
may be. (Added, 64 of 1987, s. 24)
93. (1) Any person who, by any fraudulent or reckless mis-
representation, induces another person-
(a) to make a deposit with him or any other person; or
(b)to enter into or to offer to enter into any agreement to
make a deposit with him or any other person,
commits an offence and is liable on conviction upon indictment to a
fine of $1,000,000 and to imprisonment for 7 years.
(2) For the purposes of subsection (1), 'fraudulent or reckless
misrepresentation' means-
(a) any statement-
(i) which, to the knowledge of the maker of the state-
ment, was false, misleading or deceptive; or
(ii) which was false, misleading or deceptive and was
made recklessly;
(b) any promise-
(i) which the maker of the promise had no intention of
fulfilling;
(ii) which, to the knowledge of the maker of the
promise, was not capable of being fulfilled; or
(iii) which was made recklessly;
(c) any forecast-
(i) which, to the knowledge of the maker of the fore-
cast, was not justified on the basis of facts known to him at
the time when he made it; or
(ii) which was not justified on the facts known to the
maker of the forecast at the time when he made it and was
made recklessly; or
(d)any statement or forecast from which the maker intention-
ally or recklessly omitted a material fact with the result
that the statement or forecast was thereby rendered false,
misleading or deceptive.
94. (1) Any person who, by any fraudulent, reckless or negli-
gent misrepresentation, induces another person to make a deposit
with him or any other person shall be liable to pay compensation to
the person so induced for any pecuniary loss that such person has
sustained by reason of his reliance on that misrepresentation.
(2) For the purposes of subsection (1), fraudulent reckless or
negligent misrepresentation' means
(a) any statement-
(i) which, to the knowledge of the maker of the statement,
was false, misleading or deceptive;
(ii) which was false, misleading or deceptive and was made
recklessly; or
(iii) which was false, misleading or deceptive and was made
without reasonable care having been taken to ensure its
accuracy;
(b) any promise-
(i) which the maker of the promise had no intention of
fulfilling;
(ii) which, to the knowledge of the maker of the promise,
was not capable of being fulfilled; or
(iii) which was made recklessly or without reasonable care
having been taken to ensure that it could be fulfilled;
(c) any forecast-
(i) which, to the knowledge of the maker of the forecast, was
not justified on the basis of facts known to him at the time
when he made it; or
(ii) which was not justified on the facts known to the maker
of the forecast at the time when he made it and was made
recklessly or without reasonable care having been taken to
ascertain the accuracy of those facts; or
(d)any statement or forecast from which the maker intentionally,
recklessly or negligently omitted a material fact with the result
that the statement or forecast was thereby rendered false,
misleading or deceptive.
(3) For the purposes of this section, where any statement, promise
or forecast to which this section relates was made by a company, every
person who was a director or controller of the company at the time when
the statement, promise or forecast was made shall, until the contrary is
proved, be deemed to have caused or permitted it to be made.
(4) This section does not affect any liability of any person at
common law.
(5) An action may be brought under this section notwithstanding
that the evidence on which the action is or will be based, if
substantiated, discloses the commission of an offence and no person
has been charged with or convicted of the offence.
(6) For the purposes of this section 'company' means, in addition
to a company as defined in section 2, any other body of persons,
corporate or unincorporate.
95. (1) Where the Commissioner is of the opinion that any
advertisement issued in connexion with the business of an authorized
institution makes a statement or any representation that is false,
misleading or deceptive, he may, by notice in writing served on the
institution, require the institution to withdraw or, as the circumstances
require, remove, and to cease issuing such advertisements and an
authorized institution served with such a notice shall, accordingly,
comply with that notice.
(2) Any authorized institution aggrieved by a notice served under
subsection (1) may appeal to the Financial Secretary against the
requirement contained therein, but the notice shall take effect
immediately notwithstanding that an appeal has been or may be made
under this subsection.
(3) Every director and every manager of an authorized institution
which fails or refuses to comply with any notice served under this
section on it commits an offence and is liable
(a)on conviction upon indictment to a fine of 5200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of 510,000 for every day during which
the offence continues; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
96. (1) An authorized institution shall not in any communication,
whether written or oral, represent or imply, or permit to be represented or
implied, in any manner to any person that the institution has in any
respect been approved by the Government, the Financial Secretary or
the Commissioner.
(2) Subsection (1) is not contravened by reason only that a
statement is made to the effect that an authorized institution is licensed
or registered.
(3) Every director and every manager of an authorized institution
which contravenes subsection (1) without reasonable excuse commits an
offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
97. (1) Any person, other than a bank, an institution which is
recognized as the central bank of the place in which it is incorporated, or
a local representative office maintained in accordance with this
Ordinance, who, without the written consent of the Commissioner-
(a)uses the word 'bank' or any of its derivatives in English, or
any translation thereof in any language or uses the Chinese
expression 'ngan hong' or uses the letters 'b', a n', 'k' in
that order, in the description or title under which such person
is carrying on business in Hong Kong; or
(b)makes any representation in any bill head, letter paper, notice,
advertisement or in any other manner whatsoever that such
person is a bank or is carrying on banking business in Hong
Kong,
commits an offence and is liable-
(i)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 12 months; or
(ii)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
(2) Nothing in this section shall apply to any association of
banks formed for the protection or promotion of their mutual
interests or to any association of employees of banks formed for the
protection or promotion of the mutual interests of such employees.
PART XVII
CAPITAL ADEQUACY RATIO OF AUTHORIZED INSTITUTIONS
98. (1) Subject to this Part and Part X, an authorized institution
incorporated in Hong Kong shall not, at any time, have a capital
adequacy ratio of less than 5 per cent as calculated in accordance with
the provisions of the Third Schedule and subsection (2).
(2) For the purposes of calculating the capital adequacy ratio of an
authorized institution which has any subsidiary, the accounts of the
institution are not required to be on a consolidated basis unless the
Commissioner otherwise determines in any particular case.
(3) The Financial Secretary may, by notice in the Gazette, vary the
percentage specified in subsection (1).
99. (1) Where an authorized institution contravenes section 98(1), it
shall forthwith notify the Commissioner of that contravention and
provide him with such particulars of that contravention as he may
require.
(2) Where the Commissioner is notified under subsection (1) of a
contravention of section 98(1), he shall forthwith notify the Financial
Secretary of that contravention and provide him with such particulars of
that contravention as he may require.
(3) Every director and every manager of an authorized institution
which contravenes subsection (1) commits an offence and is liable on
conviction upon indictment to a fine of $500,000 and to imprisonment for
5 years and, in the case of a continuing offence, to a further fine of
$10,000 for every day during which the offence continues.
100. (1) Where an authorized institution contravenes section 98(1),
the institution and the Commissioner shall enter into discussions for the
purposes of determining what remedial action is required to be taken by
the institution for it to comply with that section, but the Commissioner
shall not be bound by any such discussions.
(2) The Commissioner may, after holding such discussions as he
thinks fit under subsection (1), by notice in writing served on the
authorized institution, require the institution to take such remedial action
as is specified in the notice for the purpose of having the institution
comply with section 98(1).
(3) Any authorized institution aggrieved by any requirement
contained in a notice under subsection (2) served on it by the
Commissioner may appeal, by notice in writing served on the
Commissioner and the Financial Secretary stating the grounds of
the appeal, to the Financial Secretary against the requirement, but
that requirement shall take effect immediately, notwithstanding that
an appeal has been or may be made under this subsection.
(4) The Financial Secretary shall determine an appeal under
subsection (3) by confirming, varying or reversing the requirement
the subject of the appeal.
(5) Every director and every manager of an authorized institution
which contravenes any requirement contained in a notice under
subsection (2) commits an offence and is liable on conviction upon
indictment to a fine of $500,000 and to imprisonment for 5 years and, in
the case of a continuing offence, to a further fine of $10,000 for every
day during which the offence continues.
101. (1) The Commissioner may, after consultation with an authorized
institution, by notice in writing served on it vary the capital adequacy
ratio specified in section 98(1) in relation to that institution by increasing
the ratio to-
(a)in the case of an authorized institution which is a bank, not
more than 8 per cent; and
(b)in the case of an authorized institution which is a
deposit-taking company, not more than 10 per cent,
and, where the ratio is so varied, the other provisions of this Part shall, in
relation to that institution, apply as if the ratio specified in section 98(1)
were the ratio as so varied. (Amended, 64 of 1987, s. 25)
(2) The Financial Secretary may, by notice in the Gazette, vary any
percentage specified in subsection (1).
(3) An authorized institution aggrieved by a variation of the capital
adequacy ratio contained in a notice under subsection (1) served on it
by the Commissioner may appeal, by notice in writing served on the
Commissioner and the Financial Secretary stating the grounds of the
appeal, to the Financial Secretary against the variation, but that variation
shall take effect immediately, notwithstanding that an appeal has been or
may be made under this subsection.
(4) The Financial Secretary shall determine an appeal under
subsection (3) by confirming, varying or reversing the variation of
capital adequacy ratio the subject of the appeal.
PART XVIII
LIQUIDITY RATIO OF AUTHORIZED INSTITUTIONS
AND
MATTERS AFFECTING LIQUIDITY RATIO
102. (1) Subject to this Part and Part X, every authorized institution
shall maintain a liquidity ratio of not less than 25 per cent in each
calendar month as calculated in accordance with the provisions of the
Fourth Schedule and this Part.
(2) The liquidity ratio of an authorized institution shall be calculated
for each calendar month on the basis of the sum of its liquefiable assets
and the sum of its qualifying liabilities, within the meaning of the Fourth
Schedule, for each working day of the calendar month concerned except
that the Commissioner may, as he thinks fit, by notice in writing served
on an authorized institution, permit the institution to calculate its
liquidity ratio by reference to such days during the calendar month
concerned as the Commissioner may specify in the notice:
Provided that if any such specified day is a public holiday the
immediately preceding working day shall be taken for the purposes of
such calculation.
(3) In relation to an authorized institution that operates in Hong
Kong and also elsewhere, this Part shall apply only to its principal place
of business in Hong Kong and its local branches and shall do so as if
that principal place of business and those branches were collectively a
separate authorized institution.
(4) The Financial Secretary may, by notice in the Gazette, vary the
percentage specified in subsection (1).
103. (1) Where an authorized institution contravenes section 102(1),
it shall forthwith notify the Commissioner of that contraven
tion and provide him with such particulars of that contravention as he
may require.
(2) Where the Commissioner is notified under subsection (1) of a
contravention of section 102(1), he shall forthwith notify the Financial
Secretary of that contravention and provide him with such particulars of
that contravention as he may require.
(3) Every director and every manager of an authorized institution
which contravenes subsection (1) commits an offence and is liable on
conviction upon indictment to a fine of $500,000 and to imprisonment for
5 years and, in the case of a continuing offence, to a further fine of
$10,000 for every day during which the offence continues.
104. (1) Where an authorized institution contravenes section 102(1),
the institution and the Commissioner shall enter into discussions for the
purposes of determining what remedial action is required to be taken by
the institution for it to comply with that section, but the Commissioner
shall not be bound by any such discussions.
1 (2) The Commissioner may, after holding such discussions as he
thinks fit under subsection (1), by notice in writing served on the
authorized institution, require the institution to take such remedial action
as is specified in the notice for the purpose of having the institution
comply with section 102(1).
(3) Any authorized institution aggrieved by any requirement
contained in a notice under subsection (2) served on it by the
Commissioner may appeal, by notice in writing served on the Commissioner
and the Financial Secretary stating the grounds of the
appeal, to the Financial Secretary against the requirement, but that
requirement shall take effect immediately, notwithstanding that an
appeal has been or may be made under this subsection.
(4) The Financial Secretary shall determine an appeal under
subsection (3) by confirming, varying or reversing the requirement
the subject of the appeal.
(5) Every director and every manager of an authorized institution
which contravenes any requirement contained in a notice under
subsection (2) commits an offence and is liable on conviction upon
indictment to a fine of $500,000 and to imprisonment for 5 years and, in
the case of a continuing offence, to a further fine of $10,000 for every
day during which the offence continues.
105. (1) The Commissioner may, by notice in writing served on an
authorized institution, vary the liquidity ratio specified in section 102(1)
in relation to that institution by increasing or decreasing the ratio and,
where the ratio is so varied, sections 102, 103 and 104 shall, in relation to
that institution, apply as if the ratio specified in section 102(1) were the
ratio as so varied.
(2) Where the Commissioner varies under subsection (1) the
liquidity ratio of any authorized institution, he shall forthwith provide
the Financial Secretary with particulars of the variation.
(3) An authorized institution aggrieved by a variation of the
liquidity ratio contained in a notice under subsection (1) served on it by
the Commissioner may appeal, by notice in writing served on the
Commissioner and the Financial Secretary stating the grounds of the
appeal, to the Financial Secretary against the variation, but that variation
shall take effect immediately, notwithstanding that an appeal has been or
may be made under this subsection.
(4) The Financial Secretary shall determine an appeal under
subsection (3) by confirming, varying or reversing the variation of
liquidity ratio the subject of the appeal.
106. (1) Subject to subsection (2), an authorized institution
incorporated in Hong Kong shall not, except with the approval of the
Commissioner, which approval shall be subject to such conditions as he
may think proper to attach thereto, by whatever means cause the sum
total of all amounts secured by way of charge over its assets (excluding
contra items) to exceed 5 per cent of the sum total of the value of those
assets.
(2) Where, immediately upon the commencement of this Ordinance,
the sum total of all amounts secured by way of charge over the assets
(excluding contra items) of an authorized institution incorporated in
Hong Kong exceeds 5 per cent of the sum total of the value of those
assets, the institution shall be deemed to have an approval under
subsection (1) until-
(a) the expiration of 3 months after that commencement, or such
further period as the Commissioner may allow in any particular
case; or
(b) it receives an approval under subsection (1),
whichever first occurs.
(3) Where any civil proceedings have been instituted against any
authorized institution incorporated in Hong Kong, irrespective of
whether the proceedings have been instituted before, on or after the
commencement of this Ordinance, the institution shall, if those
proceedings materially affect, or could materially affect, the financial
position of the institution, forthwith notify the Commissioner of those
proceedings and provide the Commissioner with such particulars of
those proceedings as he may require.
(4) Every director and every manager of an authorized institution
which contravenes subsection (1) or (3) commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing
offence, to a further fine of $10,000 for every day during which
the offence continues; and
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months and, in the case of a continuing
offence, to a further fine of $5,000 for every day during which
the offence continues.
(5)For the purposes of subsections (1) and (2)-
'assets' includes assets outside Hong Kong;
'charge' includes lien, encumbrance, equitable interest and third party
right;
'value' shall have the same meaning assigned to it in section 79(1).
PART XIX
UNINCORPORATED BANKS
107. (1) The Governor in Council may, for the purposes of and in
accordance with section 115(2), grant a banking licence to carry on
banking business in Hong Kong to any unincorporated person or body
of persons.
(2) A banking licence may be granted under subsection (1),
notwithstanding that the unincorporated person or body of persons
does not comply and does not propose to comply with the provisions of
section 18, 75, 77, Part XVII or XVIII.
108. (1) An application for a banking licence under section 107 shall
be made to the Governor in Council through the Commissioner.
(2) An application for a banking licence under section 107 shall be
accompanied by such documents and information as the Commissioner
or the Governor in Council may require.
109. (1) An unincorporated bank shall pay the annual banking
licence fee specified in the Second Schedule.
(2) The fees payable under this section shall be paid upon the grant
of a banking licence and thereafter upon every anniversary of the date of
the grant of such banking licence.
110. (1) Every unincorporated bank shall appoint annually an auditor.
(2) The duties of the auditor so appointed shall be-
(a)to carry out for the year in respect of which he is appointed an
audit of the accounts of the bank;
(b)to make a report to the directors of the bank on the audited
accounts, the balance sheet and the profit and loss account of
the bank; and
(c)in every such report to state-
(i) whether or not all the information and explanations which
were in the opinion of the auditor necessary for the purposes
of the audit have been obtained;
(ii) whether or not, according to the best of the
information and explanations given to him, the balance sheet
and profit and loss account referred to in the report give in his
opinion a true and fair view of the state of the affairs of the
bank at the date of the balance sheet, and of the profit or loss
for its financial year, regard being had, inter alia, to the
provisions of this Ordinance;
(iii) whether or not in his opinion proper books of account
have been kept by the bank so far as appears from the audit of
the accounts; and
(iv) whether or not in his opinion proper returns, adequate
for the purposes of the audit, have been received by him from
branches of the bank not visited.
(3) Every director and every manager of a bank which contravenes
subsection (1) commits an offence and is liable
(a)on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of $50,000 and to imprisonment
for 6 months.
111. (1) An unincorporated bank shall, subject to the provisions of this
Part, be deenied to be a bank for the purposes of this Ordinance.
(2) Any person to whom, and any member or partner of any
unincorporated body of persons to which, a banking licence is granted
under section 107 shall be deemed for the purposes of this Ordinance to
be a director of a bank.
112. An unincorporated bank shall, subject to the provisions of this
Ordinance, be subject to all the provisions of this Ordinance, mutatis
mutandis, except-
(a) section 55(2)(a);
(b) sections 75, 76, 77, 78, 79, 80, 81, 83, 85, 86, 87, 88, 90 and 91;
(c) section 65;
(d) section 60(1)(c);
(e) Parts XVII and XVIII; and
any other provision of this Ordinance which is inconsistent
with the provisions of this Part or which is inapplicable in the
case of an unincorporated bank.
113. (1) An unincorporated bank shall not use the word
'bank' or any of its derivatives in English, or any translation
thereof in any language or use the Chinese expression 'ngan hong''
, or use the letters 'b', 'a', 'n', 'k' in that order, in the
description or title under which it carries on business in Hong Kong.
(2) Every director and every manager of an unincorporated bank
which contravenes subsection (1) commits an offence and is liable-
(a)on conviction upon indic ment to a fine of 100,000 and to
imprisonment for 2 years; or
(b)on summary conviction to a fine of S50,000 and to imprisonment
for 6 months.
114. (1) An unincorporation bank shall not accept or hold deposits in
excess, at any one time, of $2,000,000 or such other sum as the Governor
in Council may from time to time specify either generally or in any
particular case.
(2) Every director and every manager of a bank which contravenes
subsection (1) commits an offence and is liable
(a)on conviction upon indictment to a fine of $100,000 and to
imprisonment for 12 months; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 6 months,
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
115. (1) Upon the death of a member or partner of an unincorporated
bank, the banking licence issued to the unincorporated bank shall become
void and of no effect upon a date 6 calendar months after the date of the
death except for the purpose of winding-up the banking business of the
unincorporated bank.
(2) Notwithstanding subsection (1), the Governor in Council may
issue a new banking licence under section 107 to the remaining members
or partners of that body of persons or to a body of persons consisting
of the remaining members of that body of persons and other members or
partners who have acquired their interest in the business and assets of
the unincorporated bank of which the deceased was a member under the will
or upon the intestacy of the deceased.
(3) The remaining members or partners of an unincorporated bank
shall notify the Commissioner of the death of a member or
partner of the unincorporated bank within 1 month after the death.
(4) Every director and every manage of a bank which con-
travenes subsection (3) commits an offence and is liable on convic-
tion upon indictment or on summary conviction to a fine of $50,000
and, in the case of a continuing offence, to a further fine of $5,000 for
every day during which the offence continues.
116. Where-
(a)the Commissioner has assumed control of the business of an
authorized institution which is an unincorporated bank under
section 52(1)(C) or pursuant to an order of the Governor in
Council under section 53(1)(ii) or some other person has
assumed control of the business of such a bank pursuant to a
direction of the Commissioner under section 52(1)(C) or an
order of the Governor in Council under section 53(1)(ii); and
(b)within 3 months thereafter, whilst the Commissioner or such
other person continues to be in control of the business of
such bank, a bankruptcy petition is presented against the
bank under the Bankruptcy Ordinance, and on that petition a
receiving order is at any time made under that Ordinance
against the bank,
then-
(i)if the date on which the Commissioner or such other person
as is referred to in paragraph (a) assumed control of the
business of such bank preceded the time of the first of the
acts of bankruptcy (within the meaning of the Bankruptcy
Ordinance) proved to have been committed by such bank
within the 3 months next preceding the date of the
presentation of the bankruptcy petition, the bankruptcy of the
bank shall, for the purposes of sections 40, 43, 47(2) and (3),
and 48, of the Bankruptcy Ordinance, be deemed,
notwithstanding the provisions of section 42 of the
Bankruptcy Ordinance, to have relation back to and to
commence at the time the Commissioner or such other person
assumed control of the business of such bank;
(ii)section 45(1) of the Bankruptcy Ordinance shall apply as if it
included, as an alternative to the reference to notice of the
presentation of any bankruptcy petition by or against the
debtor or notice of the commission of any available act of
bankruptcy by the debtor, a reference, in the case of a debtor
which is an unincorporated bank, to notice that the
Commissioner or such other person as is referred to in
paragraph (a) has so assumed control of the business of the
debtor;
(iii)section 49(1) of the Bankruptcy Ordinance shall apply as if it
included, as an alternative to the reference to the person first
referred to therein being adjudged bankrupt on a bankruptcy
petition presented within 3 months after the date specified
therein, a reference, in a case where such person is an
unincorporated bank, to the assumption as aforesaid by the
Commissioner or such other person as is referred to in
paragraph (a) of control of the business of such person within
3 months after such date;
(iv)section 50(1) of the Bankruptcy Ordinance shall apply as if it
included, as an alternative to the reference in sub-
paragraph (ii) of the proviso thereto to notice of any available
act of bankruptcy committed by the bankrupt before the time
referred to therein, a reference, in the case of a bankrupt which
is an unincorporated bank, to notice that, before the said time,
the Commissioner or such other person as is referred to in
paragraph (a) has so assumed control of the business of the
bankrupt;
(v)section 51 of the Bankruptcy Ordinance shall apply as if it
included, as an alternative to the reference to notice of the
presentation of a bankruptcy petition, a reference, in a case
where the person referred to therein is an unincorporated
bank, to notice that the Commissioner or such other person as
is referred to in paragraph (a) has so assumed control of the
business of such person; and
(vi)sections 129, 133, 134, 135 and 136 of the Bankruptcy
Ordinance shall apply as if, in a case where the person referred to
therein is an unincorporated bank, the reference or references
therein to the presentation of a bankruptcy petition included in
each case a reference to the assumption as aforesaid by the
Commissioner or such other person as is referred to in
paragraph (a) of control of the business of such person.
PART XX
INVESTIGATIONS OF AUTHORIZED
INSTITUTIONS
117. (1) If it appears to the Commissioner that it is in the interests of
depositors of an authorized institution or a former authorized institution
or in the public interest that an inquiry should be made into the affairs of
that institution he may make a report to that effect to the Financial
Secretary.
(2) The Financial Secretary, on receipt of a report under subsection
(1), may appoint a competent person to investigate and report
(a)to him; and
(b)in the case of an authorized institution which is or has been a
registered deposit-taking company, to the Commissioner,
on the state and conduct of the business of the authorized institution
concerned, or any particular aspect of that business specified by him.
(3) The Financial Secretary may, from time to time after making an
appointment under subsection (2), and before the person so appointed
reports to him, require that person to inquire into any further aspect of
the authorized institution concerned.
(4) The person appointed under subsection (2) shall be paid such
remuneration and allowances and be appointed on such terms as the
Financial Secretary shall from time to time determine.
(5) On receipt of the report of the person appointed under
subsection (2) the Financial Secretary may, without limiting the
generality of the exercise by him of any other powers which he may
exercise under this Ordinance
(a)if he is of the opinion that it is in the public interest to do so,
cause the whoie or any part of a report under this section to be
published in such manner as he thinks fit:
Provided that nothing in a report published under this
paragraph shall enable any particular customer of an
authorized institution to be identified or reveal details of the
affairs of any such customer without the consent of that
customer;
(b)require the person appointed under subsection (2) to report
further on any matters arising from the report;
(c)refer the report to the Governor in Council with the
recommendation that the Governor in Council should exercise
one or more of his powers under, in the case of an authorized
institution which is a bank, sections 29 and 53 or, in the case
of an authorized institution which is a deposit-taking company,
section 53;
(d)if it appears that an offence may have been committed by any
person, refer the report to the Attorney General;
(e)in the case of an authorized institution which is a registered
deposit-taking company, refer the report to the Commissioner
with the recommendation that the Commissioner should
exercise one or more of his powers under section 31 and Part
VI;
(f) apply to the High Court for a winding-up order under section
122(5).
(6) The Financial Secretary shall not exercise his powers under
subsection (2) in the case of a former authorized institution which
ceased to be an authorized institution 12 months or more before the date
of the report under subsection (1).
(7) Any person who-
(a)with intent to defeat the purposes of this section or to delay or
obstruct the carrying out of an investigation under this
section
(i) conceals, destroys, mutilates or alters a document
relating to a matter which is the subject of an investigation by
a person appointed under subsection (2); or
(ii) sends, or causes to be sent, or conspires with another
person to send, out of Hong Kong any such document; or
(b)knowingly furnishes to a person appointed under subsection
(2) any information which is false or misleading in a material
particular,
commits an offence and is liable on conviction upon indictment or
on summary conviction to a fine of $20,000 and to imprisonment for
2 years.
118. (1) Subject to this section, the inspector may determine
the manner in which an inquiry under section 117 is to proceed.
(2) If the inspector thinks it necessary for the purposes of his
investigation, he may also investigate the business of any company
which is or has at any relevant time been-
(a)a holding company or subsidiary of the body whose
business is under investigation;
(b) a subsidiary of a holding company of that body; or
(c) a holding company of a subsidiary of that body.
(3) It shall be the duty of every director, manager, employee,
or agent of a company whose business is under investigation
(whether by virtue of section 117(2) or subsection (2)) and any
person who has in his possession books, papers or information
relevant to the investigation-
(a)to produce to the inspector all books and papers relating to
the company concerned which are in his custody or power;
(b) to attend before the inspector when required to do so; and
(c)to answer truthfully and to the best of his ability any
questions which may be put to him by the inspector and
which are relevant to the investigation:
Provided that an inspector shall not require the disclosure by a
solicitor or counsel of any privileged communication, whether oral
or written, made to or by him in that capacity.
(4) Anything said by any person in answer to a question put
by the inspector under subsection (3)(c) shall be inadmissible in any
criminal proceedings other than criminal proceedings brought under
this section.
(5) Any director, manager, employee or agent of a company
and any other person who-
(a)without reasonable excuse fails to produce any books or
papers which it is his duty to produce under subsection (3);
or
(b)without reasonable excuse fails to attend before the inspec-
tor when required to do so under this section; or
(c)fails to answer to the best of his ability any question which
is put to him by an inspector with respect to a business
which is under investigation under section 117 or to the
business of any body corporate which is being investigated
by virtue of subsection (2),
commits an offence and is liable on conviction upon indictment or on
summary conviction to a fine of $20,000 and to imprisonment for 6
months.
(6) In this section-
(a)'inspector' means a person appointed under section 117(2);
(b)any reference to a director, manager, employee or agent of a
company includes a reference to a person who has been but
no longer is a director, manager, employee or agent of that
company;
(e)'agent' in relation to a company whose business is under
investigation includes its bankers and solicitors and any
persons, whether officers of the body or not, who are
employed as its auditors.
PART XXI
MISCELLANEOUS
119. (1) In the event of any dispute as to whether a person is
carrying on a banking business or a business of taking deposits, the
matter, except in the case of a prosecution for any offence against this
Ordinance, shall be submitted to the Governor in Council for his
determination; and the decision of the Governor in Council shall be final
and conclusive for all purposes of this Ordinance.
(2) A submission under subsection (1) may be made by the
Financial Secretary or by any bank or deposit-taking company or
person which or who is interested in the determination of the matter.
120. (1) Except as may be necessary for the exercise of any function
under this Ordinance or for carrying into effect the provisions of this
Ordinance, every person to whom this subsection applies- (Amended,
64 of 1987, s. 26)
(a) shall preserve and aid in preserving secrecy regard to
all matters relating to the affairs of any company that may
come to his knowledge in the exercise of any function
under this Ordinance;
(b)shall not communicate any such matter to any person other
than the person to whom such matter relates; and
(c)shall not suffer or permit any person to have access to any
records in the possession, custody or control of any person to
whom this subsection applies.
(2)Subsection (1) shall apply to-
(a) any public officer;
(b)any person authorized or employed by the Commissioner
under section 8;
(c)any person appointed under section 52(1)(B), or by order of the
Governor in Council under section 53(1)(ii), to advise an
authorized institution in the proper conduct of its business;
(d) any person who has assumed control of the business of an
any
authorized institution pursuant to a direction under section
52(1)(C) or an order of the Governor in Council under section
53(1)(ii);
(e) any person appointed under section 117(2); and
(f) any person
employed by or assisting a person to whom this subsection
applies by virtue of paragraph (b), (e), (d), or (e),
who exercises any function under this Ordinance.
(3) Where under section 52(1)(C) or under section 53(1)(ii) the
Commissioner assumes control of and carries on the business of an
authorized institution or any other person is directed so to do,
subsection (1) shall not apply if the Commissioner or such other person
is required to comply with a notice to furnish returns and information
under section 51 of the Inland Revenue Ordinance.
(4) No person who exercises any function in the course of an
examination or investigation under section 47, 50, 55 or 117 or who
receives reports, returns or information submitted under section 47. 50,
55, 56, 63 or 64 shall be required to produce in any court any book,
account or other document whatsoever or to divulge or communicate to
any court any matter or thing coming under his notice in the exercise of
his functions under this Ordinance, except as may be necessary in the
course of a prosecution for any offence or of a winding-up by the High
Court under section 122.
(5) Subsection (1) shall not apply-
(a)to the disclosure of information in the form of a summary of
similar information provided by a number of authorized
institutions if the summary is so framed as to prevent
particulars relating to the business of any particular authorized
institution being ascertained from it;
(b)to the disclosure of information with a view to the institution
of, or otherwise for the purposes of, any criminal proceedings,
whether under this Ordinance or otherwise;
(c)in connection with any other legal proceedings arising out of
this Ordinance;
(d)to the disclosure of information to the police or the
Independent Commission Against Corruption, at the request
of the Attorney General, relevant to the proper investigation
of any criminal complaint;
(e)to the disclosure of information by the Commissioner to the
Registrar, the Council or the Disciplinary Committee under the
Professional Accountants Ordinance in respect of any
complaint that can be made under section 34 of that Ordinance in
respect of any auditor of an authorized institution, including an
auditor appointed under section 59(2) or approved under section
63(3)(b);
to the disclosure of information to the Financial Secretary, the
Secretary for Monetary Affair or to any public officer authorized
by the Financial Secretary for the purposes of this paragraph or to
the Disciplinary Committee referred to in paragraph (e) where,
in the opinion of the Commissioner, it is desirable or expedient
that information should be disclosed in the interests of
depositors or the public interest; or
(g) to the disclosure of information concerning an authorized institution, to its
auditor or former auditor, during a meeting called under section 61.
(6) Any person who-
(a) contravenes subsection (1); or
(b)aids, abets, counsels or procures any person to contravene
subsection (1),
commits an offence and is liable---
(i) on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(ii) on summary conviction to a fine of $50,000 and to
imprisonment for 6 months.
121. (1) Subject to subsection (3) and notwithstanding section 120,
the Commissioner may, if he considers that it is in the interests of the
depositors of the authorized institution, provide to the appropriate
recognized banking supervisory authority of a place outside Hong Kong
which is, in his opinion, subject to adequate secrecy provisions in that
place information on matters relating to the affairs of an authorized
institution
(a)which is incorporated, or which has its principal place of
business, in that place;
(b)which is incorporated in or outside Hong Kong and is a
subsidiary or associate of a bank incorporated in that place; or
(c)which is incorporated in Hong Kong and which has, or is
proposing to establish, in that place an overseas branch,
overseas representative office, subsidiary or associate of that
authorized institution, and where, in the case of a subsidiary or
associate, such subsidiary or associate is or would be subject
to supervision by that recognized banking supervisory
authority.
(2) Subject to subsection (3) and notwithstanding section 120, the
Commissioner may, if he considers that it is in the interests of customers
of the representative office, provide to the appropriate recognized
banking supervisory authority of a place outside Hong Kong which is, in
his opinion, subject to adequate secrecy provisions in that place
information on matters relating to the affairs of a local representative
office which is maintained by a bank incorporated in that place.
(3) Under no circumstances shall the Commissioner provide
any information under this section relating to
the affairs of any individual customer of an authorized institution or local
representative office.
122. (1) The provisions of the Companies Ordinance with regard to a
creditors' voluntary winding-up shall not apply to authorized
institutions.
(2) On a petition by the Financial Secretary, acting in accordance
with a direction of the Governor in Council under section 53(1)(iii), the
High Court may
(a)on any ground specified in section 177 of the Companies
Ordinance; or
(b)if it is satisfied that it is in the public interest that the
authorized institution or former authorized institution should be
wound up,
order the winding-up of an authorized institution or former authorized
institution in accordance with the provisions of the Companies
Ordinance relating to the winding-up of companies.
(3) Where before the presentation of a petition for the winding-up of
an authorized institution by the court, whether or not the petition is
presented by the Financial Secretary, the Commissioner has assumed
control of the business of the institution under section 52(1)(C) or
pursuant to an order of the Governor in Council under section 53(1)(ii) or
some other person has assumed control of the business of the institution
pursuant to a direction of the Commissioner under section 52(1)(C) or an
order of the Governor in Council under section 53(1)(ii) and such control
has continued at all times until the presentation of the petition, and a
winding-up order is made thereon, then, notwithstanding the provisions
of section 184(2) of the Companies Ordinance, the winding-up of the
institution by the court shall, for the purposes of sections 170, 179, 182,
183, 266, 267, 269 and 274, and paragraphs (d), (e), (h), (i), (j), (k), (1),
(m), (n) and (o) of section 271(1), of the Companies Ordinance, be deemed
to have commenced at the time the Commissioner or such other person
assumed control of the business of the institution.
(4) Where the Commissioner has assumed control of the business
of an authorized institution under section 52(1)(C) or pursuant to an
order of the Governor in Council. under section 53(1)(ii) or some other
person has assumed control of the business of
an authorized institution pursuant to a direction of the Commissioner
under section 52(1)(C) or an order of the Governor in Council under
section 53(1)(ii), nothing in section 182 of the Companies Ordinance
shall invalidate any disposition of the property of the institution made
by it under the direction of the Commissioner or such person acting
bona fide in the course of the carrying on of the business of the
institution.
(5) Where the Financial Secretary is entitled to petition the
High Court by virtue Of section 117(5)(f), the High Court may wind
up a deposit-taking company or former deposit-taking company in
accordance with the provisions of the Companies Ordinance relating
to the winding-up of companies if-
(a) the company is unable to pay sums due and payable to its depositors
or is able to pay such sums only by defaulting on its
obligations; or
(b) the value of the company's assets is less than the amount of its liabilities.
(6) Nothing in this section shall authorize the winding-up of a former deposit-taking
company which does not continue to have any liability in respect of any
deposit for which it had a liability at the time when it was registered
or licensed.
123. Any director, manager, trustee, employee or agent of any
authorized institution who, with intent to deceive--
(a)wilfully makes, or causes to be made, a false entry in any book
of record or in any report, slip, document or statement of the
business, affairs, transactions, condition, assets or accounts of
the institution;
(b)wilfully omits to make an entry in any book of record or in any
report, slip, document or statement of the business, affairs,
transactions, condition, assets or accounts of the institution,
or wilfully causes any such entry to be omitted; or
(c)wilfully alters, abstracts, conceals or destroys an entry in any
book of record, or in any report, slip, document or statement of
the business, affairs, transactions, condition. assets or
accounts of the institution, or wilfully causes any such entry to
be altered, abstracted, concealed or destroyed,
commits an offence and is liable-
(i)on conviction upon indictment to a fine of $500,000 and to
imprisonment for 5 years; or
(ii)on summary conviction to a fine of S50,000 and to
imprisonment for 2 years.
124. Any director or employee of an authorized institution, who asks
for or receives, consents or agrees to receive any gift. commission,
emolument, service, gratuity, money, property or thing
of value for his own personal benefit or advantage or for that of any of
his relatives, for procuring or endeavouring to procure for any person
any advance, loan, financial guarantee or credit facility from that
institution or the purchase or discount of any draft, note, cheque, bill of
exchange or other obligation by that institution, or for permitting any
person to overdraw any account with that institution, commits an
offence and is liable
(a)on conviction upon indictment to a fine of $100,000 and to
imprisonment for 5 years; or
(b)on summary conviction to a fine of $50,000 and to
imprisonment for 2 years.
125. (1) If a magistrate is satisfied by information on oath that there
is reasonable ground for suspecting that an offence under this
Ordinance has been committed, the magistrate may issue a warrant
empowering any police officer to enter and search any premises
specified in the warrant.
(2) A police officer to whom a warrant is issued under subsection
(1) may
(a)break open any outer or inner door of or in any premises
which he is empowered by the warrant to enter and search;
(b)inspect, seize and remove anything which the police officer
has reasonable grounds for believing to be or to contain
evidence of an offence under this Ordinance. and
(c)remove by force any person who obstructs any entry, search,
inspection, seizure or removal which he is empowered by this
subsection to make.
(3) A person from whom any books, accounts or other documents
have been seized and removed under subsection (2) shall, pending any
proceedings for an offence under this Ordinance, be entitled to take
copies of or extracts from such books, accounts or other documents.
(4) Any person who obstructs a police officer in the exercise of any
power conferred on him by subsection (2) commits an offence and is
liable on conviction upon indictment or on summary conviction to a fine
of $50,000 and to imprisonment for 6 months.
126. (1) Subject t subsection (2), any person who is prose
cuted in respect of any offence under this Ordinance shall have a
good defence if he proves that the offence was committed without his
consent or connivance and that he exercised all such diligence to prevent the
commission of the offence as he ought to have exercised having regard
to his position in the authorized institution in respect
of which the offence was committed.
(2) Subsection (1) shall not apply to an offence under section
46(8), 47(2) or (3), 50(6), 64(5), 72(4) 73(2), 97(1), 117(7), 118(5),
120, 123 or 124.
127. No liability shall be incurred by
(a) any public officer;
(b)any person authorized or employed by the Commissioner
under section 8;
(c)any person appointed under section 52(1)(B), or by order of
the Governor in Council under section 53(1)(ii), to advise an
authorized institution in the proper conduct of its business;
(d)any person who has assumed control of the business of an
authorized institution pursuant to a direction under section
52(1)(C) or an order of the Governor in Council under section
53(1)(ii); or
(e) any person appointed under section 117(2),
as a result of anything done or omitted to be done by him bona fide in
the exercise or purported exercise of any functions conferred or imposed
by or under this Ordinance.
128. Notwithstanding anything contained in the articles of
association or regulations of any authorized institution incorporated in
Hong Kong with respect to the execution of instruments under its seal,
but without prejudice to anything in such articles or regulations not
inconsistent herewith, the seal of the institution shall not be affixed to
any instrument except in the presence of a director of the institution and
of one other person being either a director or an officer of the institution
duly authorized in that behalf, and that director and such other person
shall sign every instrument to which the seal of the institution is so
affixed in their presence.
129. (1) The contravention of any prohibition in this Ordinance or in
any Ordinance repealed by this Ordinance on the entering into of any
contract shall not render that contract unenforceable. (Amended, 64
of 1987, s. 27)
(2) Subsection (1) shall be deemed to have had effect from 1 April
1976, so, however, that nothing in that subsection as read with this
subsection shall have effect in relation to any legal proceedings
commenced before the commencement of this Ordinance.
130. (1) Notwithstanding any rule of law, any deposit taken in
contravention of section 12 or 14, and any interest accrued thereon, may
be recovered by the depositor as money had and received.
(2) Where the licence or, as the case may be, the registration of an
authorized institution is revoked or suspended under this Ordinance,
such revocation or suspension shall not affect any right
(a) of any person against the institution; or
(b) of the institution against any person.
131. (1) There shall be recoverable at the suit of the Attorney
General as a civil debt due to the Crown from the authorized institution
concerned; or in the case of an unincoporatedbank, from the directors
jointly and severally thereof-
(a)the amount of any fees payable under section 19, 23, 26, 45,
48. 51 or 109;
(b)any remuneration and expenses payable by the authorized
institution to any person appointed under section 52(1)(B) or
by order of the Governor in Council under section 53(1)(ii) to
advise the institution in the proper conduct of its business;
(c)any remuneration and expenses payable by the authorized
institution to the Commissioner or to any person employed or
authorized by the Commissioner under section 8 to assist him
in the control and carrying on of the business of the
institution or to any other person who has assumed control of
the business of the institution pursuant to a direction under
section 52(1)(C) or an order of the Governor in Council under
section 53(1)(ii);
(d)any expenses ordered by the Financial Secretary to be
defrayed by the authorized institution under section 55(3);
and
(e)any remuneration payable by the authorized institution to an
auditor appointed under section 59(2).
(21) There shall be recoverable, at the suit of the Attorney General,
as a civil debt due from the applicants, jointly and severally, to the
Crown, any expenses ordered by the Financial Secretary to be defrayed
by the applicants under section 55(3).
(3) Any sum recoverable under this section at the suit of the
Attorney General shall be a debt due to the Crown within the meaning
of section 265(1)(a) of the Companies Ordinance and section 38(1)(a) of
the Bankruptcy Ordinance.
132. (1) All entries in books and accounts kept by authorized
institutions shall be recorded in the English language and the Arabic
system of numerals shall be employed.
(2) All forms and information required to be sent and all returns
required to be made to the Commissioner pursuant to any of the
provisions of this Ordinance shall be compiled in the English language
and the Arabic system of numerals and.. if any such form, information or
return is a translation, be certified to the satisfaction of the
Commissioner as a true and correct translation.
(3) Every director and every manager of an authorized institution
which contravenes subsection (1) or (2) commits an offence and is liable
on conviction upon indictment or on summary conviction to a fine of
S50,000 and, in the case of a continuing offence, to a further fine of
$5,000 for every day during which the offence continues.
133. The Commissioner may specify the form of application for
licensing or registration and of any notice, certificate or other document
required for the purposes of this Ordinance.
134. Without limiting the generality of section 356 of the Companies
Ordinance, a document may be served on an authorized institution by
leaving it at or sending it by post to its principal place of business in
Hong Kong.
135. (1) The Governor in Council may, by notice in the Gazette,
amend the First Schedule.
(2) The Legislative Council may, by resolution, amend the Second
Schedule.
(3) The Financial Secretary may, by notice in the Gazette, amend
the Third and Fourth Schedules.
(4) The Commissioner may, by notice in the Gazette, amend the
Fifth Schedule.
136. No prosecution in respect of any offence under this Ordinance
shall be instituted without the consent in writing of the Attorney
General.
137. [Amendments Incorporated]
137A. (1) Subject to subsection (2), the Gambling Ordinance shall
not apply to any transaction proposed to be entered into, or entered
into, by an authorized institution.
(2) Subsection (1) shall not apply to a transaction, or a transaction
belonging to a class of transactions, specified by the Commissioner by
notice in the Gazette as being a transaction, or a class of transactions,
as the case may be, to which that subsection shall not apply.
(Added, 64 of 1987, s. 28)
PART XXII
TRANSITIONAL, SAVINGS AND
REPEAL
138. In this Part, unless the context otherwise requires-
'flormer bank' means a bank which, immediately before the
commencement of this Ordinance, held a former banking licence;
'former Banking Advisory Committee' means the Banking Advisory
Committee established by section 3 of the former Banking
Ordinance and as constituted immediately before the
commencement of this Ordinance;
'former banking licence' means a licence granted under section 7 or
42 of the form er Banking Ordinance and in force immediately
before the commencement of this Ordinance;
'former Banking Ordinance' means the Banking Ordinance 1964
repealed by this Ordinance;
'former Commissioner' means the person who was, immediately before
the commencement of this Ordinance, the Commissioner of Banking
under section 4 of the former Banking Ordinance and, for the
purposes of this Part, any reference in the former Deposit-taking
Companies Ordinance to the Commissioner of Deposit-taking
Companies shall be deemed to be a reference to such Commissioner
of Banking;
'former Deposit-taking Companies Advisory Committee' means the
Deposit-taking Companies Advisory Committee established by
section 4 of the former Deposit-taking Companies Ordinance and as
constituted immediately before the commencement of this
Ordinance;
'former deposit-taking licence' means a licence granted under section
16B of the former Deposit-taking Companies Ordinance and in force
immediately before the commencement of this Ordinance;
'former Deposit-taking Companies Ordinance' means the Deposittaking
Companies Ordinance 1976 repealed by this Ordinance;
'former registration' means registration under section 10 of the former
Deposit-taking Companies Ordinance which was in force
immediately before the commencement of this Ordinance.
139. (1) Any member of the former Banking Advisory Committee
who was such a member by virtue of an appointment under section 3(2)
of the former Banking Ordinance shall, on and from the commencement
of this Ordinance, be deemed to be a member of the Banking Advisory
Committee as if, on that commencement, he had been appointed under
section 4(2) to be a member of the Banking Advisory Committee for the
period he had left to serve, immediately before that commencement, as a
member of the former Banking Advisory Committee and, for that
purpose and for that period, the terms on which he was so appointed as
a member of the former Banking Advisory Committee shall be the terms
on which he shall be a member of the Banking Advisory Committee.
(2) Any member of the former Deposit-taking Companies Advisory
Committee who was such a member by virtue of an appointment under
section 5(1)(c) of the former Deposit-taking Companies Ordinance shall,
on and from the commencement of this Ordinance, be deemed to be a
member of the Deposit-taking Companies Advisory Committee as if, on
that commencement, he
had been appointed under section 5(2) to be a member of the
Deposit-taking Companies Advisory Committee for the period he
had left to serve, immediately before that commencement, as a
member of the former Deposit-taking Companies Advisory Com-
mittee and, for that purpose and for that period, the terms on which
he was so appointed as a member of the former Deposit-taking
Companies Advisory Committee shall be the terms on which he shall
be a member of the Deposit-taking Companies Advisory Com-
mittee.
140. The former Commissioner shall, on and from the commen-
cement of this Ordinance, be deemed to be the Commissioner as if,
on that commencement, he had been appointed under section 6 to be
the Commissioner of Banking, and the provisions of this Ordinance
shall apply accordingly.
141. Any person who was, immediately before the commence-
ment of this Ordinance, authorized or employed under section 4A of
the former Banking Ordinance to assist the former Commissioner in
the exercise of his functions and duties under the former Banking
Ordinance, either generally or in any particular case, shall, on and
from the commencement of this Ordinance, be deemed, in the like
capacity, to be authorized or employed to assist the Commissioner
in the exercise of his functions under this Ordinance as if, on that
commencement, he had been, in the like capacity, authorized or
employed under section 8 to assist the Commissioner in the exercise
of his functions under this Ordinance for the period he had left,
immediately before that commencement, to be so authorized or
employed under the former Banking Ordinance.
142. Where, immediately before the commencement of this
Ordinance, there was in existence-
(a)an application for a former banking licence under section 6
of the former Banking Ordinance in relation to which the
Governor in Council had not granted or refused a former
banking licence under section 7 of the former Banking
Ordinance;
(b)an application for former registration under section 9 of
the former Deposit-taking Companies Ordinance in rela-
tion to which there has not been any registration or refusal
of registration by the Commissioner under section 10 of
the former Deposit-taking Companies Ordinance; or
(c)an application for a former deposit-taking licence under
section 16A of the former Deposit-taking Companies
Ordinance in relation to which the Financial Secretary had
not granted or refused a former deposit-taking licence
under section 16B of the former Deposit-taking Com-
panies Ordinance,
then-
(i)in the case of an application referred to in paragraph (a), the
application shall be deemed to be an application under section
15 for a banking licence;
(ii)in the case of an application referred to in paragraph (b), the
application shall be deemed to be an application under section
20 for registration; and
(iii)in the case of an application referred to in paragraph (e), the
application shall be deemed to be an application under section
24 for a deposit-taking licence,
and the provisions of this Ordinance shall apply accordingly.
143. (1) Any former banking licence shall, on and from the
commencement of this Ordinance, be deemed to be
(a)in the case of a former banking licence granted under section 7
of the former Banking Ordinance, a banking licence granted
under section 16; and
(b) in the case of a former banking licence issued under section
42 of former Banking Ordinance, a banking licence
granted under section 107,
and the provisions of this Ordinance shall apply accordingly.
(2) Any former registration shall, on and from the commencement of
this Ordinance, be deeTed to be registration under section 21, and the
provisions of this Ordinance shall apply accordingly.
(3) Any former deposit-taking licence shall, on and from the
commencement of this Ordinance, be deemed to be a deposit-taking
licence granted under section 25, and the provisions of this Ordinance
shall apply accordingly.
(4) Notwithstanding Part VII of the former Deposit-taking
Companies Ordinance, any former registration or former deposittaking
licence which was, immediately before the commencement of this
Ordinance, suspended under that Part shall, on and from that
commencement, but subject to section 146, be deemed, for the purposes
of subsections (2) and (3) and the definitions of 'former registration'
and 'former deposit-taking licence' in section 138, to be in force
immediately before that commencement.
144. Where, under this Ordinance, a bank. (including an un-
incorporated bank), registered deposit-taking company or licensed
deposit-taking company is required to pay any fee specified in the
Second Schedule, irrespective of whether the words 'authorized
institution' are used to create any such requirement, by reference to the
anniversary of the date on which the bank, registered deposittaking
company or licensed deposit-taking company was licensed or
registered, as the case may be, or words to that effect, and the
banking licence, registration or deposit-taking licence, as the case may
be, held by that bank, registered deposit-taking company or licensed
deposit-taking company is deemed by virtue of section 143 to be a
banking licence, registration or deposit-taking licence, as the case may
be, then, for the purposes of paying any such fee, and notwithstanding
any other provision of this Ordinance, such reference to the anniversary
of the date on which the bank, registered deposit-taking company or
licensed deposit-taking company was licensed or registered shall be the
anniversary of the date on which the bank, registered deposit-taking
company or licensed deposittaking company was licensed or registered,
as the case may be, under the former Banking Ordinance or former
Deposit-taking Companies Ordinance, as the case may be.
145. (1) Where, immediately before the commencement of this
Ordinance, there was in force any condition attached to a former
banking licence under section 7(1)(b) or 7A of the former Banking
Ordinance and, on and from that commencement, the former banking
licence is deemed by virtue of section 143 to be a banking licence, then,
on and from that commencement, any such condition shall be deemed to
be a condition attached to the banking licence as if, on that
commencement, the Governor in Council had attached such condition
under section 17 to the banking licence, and the provisions of this
Ordinance shall apply accordingly.
(2) Where, immediately before the commencement of this
Ordinance, there was in force any condition attached to a former deposit-
taking licence under section 16B(1)(a) or (3) of the former Deposit-taking
Companies Ordinance and, on and from that commencement, the former
deposit-taking licence is deemed by virtue of section 143 to be a deposit-
taking licence, then, on and from that commencement, any such
condition shall be deemed to be a condition attached to the deposit-
taking licence as if, on that commencement, the Financial Secretary had
attached such condition under section 25(3) to the deposit-taking
licence, and the provisions of this Ordinance shall apply accordingly.
(3) Where any local branch to which section 44(3) applies had in
force, immediately before the commencement of this Ordinance, an
approval under section 12A(I) or (3) of the former Banking Ordinance or
section 16H(I) or (3) of the former Deposit-taking Companies Ordinance
to which was attached any condition under section 12A(4) of the former
Banking Ordinance or section 16H(4) of the former Deposit-taking
Companies Ordinance and which condition was in force immediately
before that commencement, then, on and from that commencement, any
such condition shall be deemed to be attached to the approval under
section 44 of -the local branch as if, on that commencement, the
Commissioner had attached such condition under section 44(4) to the
approval, and the provisions of this Ordinance shall apply accordingly.
(4) Where any local representative office to which section 46(2)
applies had in force, immediately before the commencement of this
Ordinance, an approval under section 12C(I) or (2) of the former Banking
Ordinance to which was attached any condition under section l2Q4) of
the former Banking Ordinance and which condition was in force
immediately before that commencement, then, on and from that
commencement, any such condition shall be deemed to be attached to
the approval under section 46 of the local representative office as if, on
that commencement, the Commissioner had attached such condition
under section 46(4) to the approval, and the provisions of this
Ordinance shall apply accordingly.
(5) Where any overseas branch or overseas representative office to
which section 49(3) applies had in force, immediately before the
commencement of this Ordinance, an approval under section 12F(I) or
(3) of the former Banking Ordinance or section 16J(1) or (3) of the former
Deposit-taking Companies Ordinance to which was attached any
condition under section 12F(4) of the former Banking Ordinance or
section 16J(4) of the former Deposit-taking Companies Ordinance and
which condition was in force immediately before that commencement,
then, on and from that commencement, any such condition shall be
deemed to be attached to the approval under section 49 of the overseas
branch or overseas representative office, as the case may be, as if, on
that commencement, the Commissioner had attached such condition
under section 49(4) to the approval, and the provisions of this
Ordinance shall apply accordingly.
146. Where any former registration or former deposit-taking licence
which is, on and from the commencement of this Ordinance, deemed by
virtue of section 143 to be registration or a deposit-taking licence, was,
immediately before that commencement, suspended under Part VII of the
former Deposit-taking Companies Ordinance, then, on and from that
commencement, that registration or that deposit-taking licence, as the
case may be, shall, in the like manner, be deemed to be suspended under
Part VI for the period concerned of such suspension left to serve
immediately before that commencement as if, on that commencement
and for that period, the designated authority under Part VI had
suspended that registration or deposit-taking licence, as the case may
be, and the provisions of this Ordinance shall apply accordingly.
147. Where an act, matter or thing has been done under Part IV of
the former Banking Ordinance by the Commissioner, the Financial
Secretary or the Governor in Council to or in relation to a former bank
and, on and from the commencement of this Ordinance, the former
banking licence held by the former bank is deemed by virtue of section
143 to be a banking licence, then, on and from that commencement, to
the extent that but for the enactment of this
Ordinance that act, matter or thing would on or after that commencement
have had any force or effect or been in operation, shall, in the like
manner, be deemed to have been done under Part X by the
Commissioner, the Financial Secretary or the Governor in Council, as the
case may be, to or in relation to the bank which holds that banking
licence as if, on that commencement, that act, matter or thing were, to
that extent, done under Part X by the Commissioner, the Financial
Secretary or the Governor in Council, as the case may be, to or in relation
to the bank, and the provisions of this Ordinance shall apply
accordingly.
148. (1) A letter of comfort which was, immediately before the
commencement of this Ordinance, deemed by virtue of section 23(5) of
the former Banking Ordinance to at all times to have been accepted
under paragraph (M) of the proviso to section 23(1) of the former
Banking Ordinance shall, on and from that commencement, be deemed at
all times to have been accepted under paragraph (c) of the proviso to
section 81(2), and the provisions of this Ordinance shall, subject to
subsection (2), apply accordingly.
(2) Where the former Commissioner had not, before the
commencement of this Ordinance, exercised his powers under section
23(6) of the former Banking Ordinance in relation to the former bank for
which a letter of comfort referred to in subsection (1) was provided, then,
on and from that commencement, and until such time as the
Commissioner exercises his powers under section 81(7) in relation to the
bank for which that letter of comfort is provided, the provisions of
section 81(5) shall not apply in relation thereto.
(3) A letter of comfort which was, immediately before the
commencement of this Ordinance, deemed by virtue of section 22(5) of
the former Deposit-taking Companies Ordinance to at all times to have
been accepted under paragraph (M) of the proviso to section 22(1) of the
former Deposit-taking Companies Ordinance shall, on and from that
commencement, be deemed at all times to have been accepted under
paragraph (c) of the proviso to section 81(2), and the provisions of this
Ordinance shall, subject to subsection (4), apply accordingly.
(4) Where the former Commissioner had not, before the
commencement of this Ordinance, exercised his powers under section
22(6) of the former Deposit-taking Companies Ordinance in relation to
the former deposit-taking company for which a letter of comfort referred
to in subsection (3) was provided, then, on and from that
commencement, and until such time as the Commissioner exercises his
powers under section 81(7) in relation to the deposittaking company for
which the letter of comfort is provided, the provisions of section 81(5)
shall not apply in relation thereto.
(5) Where at the commencement of this Ordinance the financial
exposure of an authorized institution to any persons exceeds that which
is permitted by section 81, but would not do so if no
account were taken of investments (as defined in subsection (10) of that
section) that were made by the institution before such commencement,
then those investments may be disregarded for the purposes of
calculating the financial exposure of the institution under that section for
(a)a period of not more than 3 months from the commencement of
this Ordinance; or
(b)such longer period as may be approved by the Commissioner
in writing in any particular case,
provided that the institution does not in any such period further
increase its financial exposure, within the meaning of that section, to the
same persons.
148A. (1) Where, immediately before 1 September 1986, any period
allowed under the proviso to section 27(1) of the former Banking
Ordinance, or under section 23B(3) of the former Deposittaking
Companies Ordinance, had not expired then, on and from that date, the
unexpired portion of that period shall be deemed to be a further period
approved under, and for the purposes of, the proviso to section 87(1) as
if, on that date, the Commissioner had given such approval under the
proviso to section 87(1), and the provisions of this Ordinance shall
apply accordingly.
(2) Where, immediately before 1 September 1986, any period allowed
under section 23B(2) of the former Deposit-taking Companies Ordinance
had not expired then, on and from that date, the unexpired portion of that
period shall be deemed to be a further period approved under, and for
the purposes of, section 87(2)(a) as if, on that date, the Commissioner
had given such approval under section 87(2)(a), and the provisions of
this Ordinance shall apply accordingly.
(3) Where, immediately before 1 September 1986, there was in force
any approval under section 27(2) of the former Banking Ordinance then,
on and from that date, any such approval shall be deemed to be an
approval under, and for the purposes of, section 87(2)(b) as if, on that
date, the Commissioner had given such approval under section 87(2)(b).
(Added, 64 of 1987, s. 29)
149. The Banking Ordinance 1964 and the Deposit-taking Companies
Ordinance 1976 And all subsidiary legislation made under either of those
Ordinances are repealed.
FIRST SCHEDULE [ss. 14 & 135(1).]
SPECIFIED SUM
1.The sum for the purposes of section 14(1)(a) is $100,000 or an equivalent
amount in any other currency.
2.The sum for the purposes of section 14(1)(b) is $500,000 or an equivalent
amount in any other currency.
SECOND SCHEDULE [ss. 19, 23, 26, 27,
45, 48, 51, 109,
135(2) & 144.]
FEES
1. Annual banking licence fee for bank, other than an unincorporated
bank (section 19(1)) ............... 360,000
2. Registration fee (section 23(1)) . 50,000
3. Renewal of registration fee (section 23(2)) 50,000
4. Deposit-taking licence fee (section 26(1)) 170,000
5. Renewal of deposit-taking licence fee (section 26(2)) 170,000
6. Inspection fee (section 27(3)) ........ 10
7. Fee for a copy or extract, per page (section 27(3)) 5
8. Fee for the establishment of a local branch of a bank (section 45(1)) 17,000
9. Annual fee for maintaining a local branch of a bank (section 45(1)
and (2)) ...... . ............... 17.000
10. Fee for the establishment of a local branch of a deposit-taking
company (section 45(1)) ....................................................
8,500
11. Annual fee for maintaining a local branch of a deposit-taking
company (section 45(1) and (2)) ...........................................
8,500
12. Fee for the establishment of a local resentative office (section
48(1)) .....................................
17,000
13. Annual fee for maintaining a local representative office (section
48(1), (2) and (3)) .......... 17,000
14. Fee for the establishment of an overseas branch of a bank (section
51(1)) ....................................................
34,000
15. Annual fee for maintaining an overseas branch of a bank (section
51(1) and (2)) .. . ............. 34,000
16. Fee for the establishment of an overseas branch of a deposit-taking
company (section 51(1)) ..............................................
17,000
17. Annual fee for maintaining an overseas branch of a deposit-taking
company (section 5 1 (1) and (2)) ......................................
17,000
18. Fee for the establishment of an overseas representative office of a
bank (section 51(1)) ................... ...................................
8,500
19. Annual fee for maintaining an overseas representative office of a
bank (section 51 (1) and (2)) .......................................
9,500
20. Fee for the establishment of an overseas representative office of a
deposit-taking company (section 51 (1)) 8,500
21. Annual fee for maintaining an overseas representative office of a
deposit-taking company (section 51 (1) and(2)) 8,500
22. Annual banking licence fee for unincorporated bank (Section 109(1)) .. 5,000
THIRD SCHEDULE [ss. 98 & 135(3).]
CAPITAL ADEQUACY RATIO
1. In this Schedule-
'book value' in relation to any thing referred to in this Schedule means its current
book value, after deducting any provision made in the books against a
reduction in its value;
'debt securities' means any securities other than shares or stocks;
'eligible bank' means-
(a)any authorized institution which is a bank or licensed deposit-taking
company (other than any deposit-taking company the licence of which is
for the time being suspended under this Ordinance); and (Amended, L.N.
412187)
(b)any bank incorporated outside Hong Kong which is not licensed under this
Ordinance, except a bank which is, in the opinion of the Commissioner.
riot adequately supervised by an appropriate, recognized banking
supervisory authority of the place in which it is incorporated;
'eligible Government' means-
(a) the Government; and
(b)any other government, except a government which is, in the opinion of
the Commissioner, one that should not be accepted for the purposes of
this Schedule;
'guarantee' includes indemnity;
'registered deposit-taking company' does not include any deposit-taking company
the registration of which is for the time being suspended under this Ordinance.
2. The capital adequacy ratio of an authorized institution shall be calculated as
the ratio, expressed as a percentage, of its capital base, as specified in paragraph 3,
to its risk assets, as specified in paragraph 4.
3. The capital base of an authorized institution shall be determined by taking
the sum, calculated in Hong Kong dollars, of the book value of
(a) its paid-up capital;
(b)its general reserves, including inner reserves, share premium account and
revaluation reserves;
(c) its undistributed profits as shown in the latest audited accounts, less-
(i) any dividends subsequently declared, or paid, but not provided; and
(ii) any net loss for the period since the end of the period covered by
the latest audited accounts;
(d)where the Commissioner determines under section 98(2) that the accounts
of the institution are to be on a consolidated basis, its minority interests;
and
(e)its perpetual subordinated debt, but not exceeding the equivalent of half of
the total of the amounts referred to in sub-paragraphs (a), (b), (c) and (d),
and by deducting therefrom the sum, calculated in Hong Kong dollars, of the book
value of
(i)its shareholding in any company which is a subsidiary or the holding
company of the institution, other than any shareholding that falls to be
deducted under sub-paragraph (ii);
(ii) its loans to, shares and debentures issued by, and guarantees of liabilities of,
connected companies of the institution, where in the opinion of the
Commissioner the institution has made the loans, is holding the shares or
debentures or, as the case may be, has given the guarantees, other than in
the ordinary course of business; and for the purposes of this sub-paragraph
',shares' and 'debentures' shall have the meaning assigned to them by
section 2 of the Companies Ordinance, and a company shall be treated as a
connected company of the institution if it is a subsidiary or the holding
company of the institution, or is otherwise of a description failing within
section 64(1)(a), (b), (c), (d) or (e); and
(iii) the intangible assets of the institution.
4. The risk assets of an authorized institution shall be the sum of all the
products achieved by
(a)taking the book value, calculated in Hong Kong dollars, of each of the
items referred to in the Table in relation to that institution; and
(b)in relation to each item, multiplying that value by the risk weight specified
in the Table for the category to which that item belongs:
Provided that no item that has been deducted under paragraph 3(i),
(5) or (iii) in calculating the capital base of the institution shall be taken
into account for the purposes of this paragraph.
TABLE
Category I-risk weight 0.0
Item Nature of item
Government certificates of indebtedness held by the institution for
note
issue.
(b) Currency notes and coins held by the institution.
(C) Gold in any form which is an asset of the institution and which it has
contracted to sell to customers.
(d) Shares, stocks and debt securities which are an asset of the institution
and which it has contracted to sell to customers.
(e) Liabilities of the institution, whether contingent or otherwise, in
respect
of forward foreign exchange contracts, interest rate swap contracts,
currency swap contracts, option contracts and futures contracts.
Liabilities of the institution, whether contingent or otherwise, in
respect
of-
(i) bills received by the institution for the purpose of the collection
of funds;
(ii) letters of guarantee in respect of the import of goods, in relation
to which the institution is liable under import bills;
(iii) trust receipts in respect of the movement of goods, in relation
to
which the institution either has made loans which are outstanding or is
liable under letters of credit.
(9) Underwriting commitments of the institution that have subsisted for
less than 3 months.
Category II-risk weight 0.2
Item Nature of item
(a) Loans made by the institution to eligible banks and eligible govern-
ments, being loans that mature or are callable within 1 year and are not
subordinated to the claims of ordinary creditors of the borrowers.
(b) Debt securities held by the institution that were issued by eligible banks
or eligible governments, are redeemable within 1 year and are not
subordinated to the claims of ordinary creditors of the issuers.
(C) Loans made by the institution that are guaranteed by an eligible bank
or eligible government and mature or are callable within 1 year.
(d) Debt securities held by the institution that are guaranteed by an eligible
bank or eligible government and are redeemable within 1 year.
(e) Guarantees given by the institution in respect of the financial liabilities
of eligible banks and eligible governments.
Contingent liabilities of the institution that are guaranteed by eligible
banks or eligible governments.
(9) Loans by, and contingent liabilities of, the institution that are secured
by cash deposits of equivalent value with the institution.
Category III-risk weight 0.5
Item Nature of item
(a) Bills, certificates, notes, paper and debt securities held by the
institution
which-
(i) are negotiable;
(ii) have a remaining term to maturity of not less than 1 year and
not more than 10 years; and
(iii) have been issued, guaranteed or accepted by eligible banks or
eligible governments.
Item Nature of item
(b) Import bills and export bills held by the institution that mature within
6
months or are payable after sight.
(c) Loans made by the institution to registered deposit-taking companies,
being loans that mature or are callable within 1 year and are not
subordinated to the claims of ordinary creditors of the borrowers.
(d) Debt securities held by the institution that were issued by registered
deposit-taking companies, are redeemable within 1 year and are not
subordinated to the claims of ordinary creditors of the issuers.
(e) Loans made by the institution that are guaranteed by registered
deposit-taking companies and mature or are callable within 1 year.
(f) Debt securities held by the institution that are guaranteed by
registered deposit-taking companies and are redeemable within 1
year.
(g) Guarantees given by the institution in respect of the financial liabilities
of registered deposit-taking companies.
(h) Contingent liabilities of the institution that are guaranteed by regis-
tered deposit-taking companies.
(i) Underwriting commitments of the institution that have subsisted for
not less than 3 months.
(j) All contingent liabilities of the institution not specified elsewhere in
this
Table.
Category IV-risk weight 10
Item Nature of item
(a) Equity investments by the institution in any company, not being a
subsidiary of the institution, in which the institution holds the bene-
ficial ownership, directly or indirectly, of not less than 20 per cent of
the
share capital.
Category V-risk weight 1.0
Item Nature of item
(a) All assets not specified elsewhere in this Table.
FOURTH SCHEDULE [ss. 102 & 135(3).]
LIQUIDITY RATIO
1. In this Schedule-
'relevant bank' means
(a) any authorized institution (other than a deposit-taking company the
registration licence of which is for the time being suspended undef this
Ordinance); and (Replaced, L.N. 413/87)
(b)any bank incorporated outside Hong Kong which is not licensed under this
Ordinance, except a bank which is, in the opinion of the Commissioner,
not adequately supervised by an appropriate, recognized banking
supervisory authority in the place in which it is incorporated,
and includes the Exchange Fund established by the Exchange Fund Ordinance;
(Amended, 64 of 1987, s.
30)
'one-month liability' in relation to any authorized institution or relevant bank
means
(a)any liability, other than a contingent liability, the effect of which will or
could be to reduce within 1 month the liquefiable assets of that institution
or relevant bank; and
(b)any contingent liability that in the opinion of the Cornnuissioner may
result in a reduction within 1 month of the liquefiable assets of that
institution or relevant bank.
2. The liquidity ratio of an authorized institution shall be calculated as the
ratio, expressed as a percentage, between its liquefiable assets, as specified in
paragraph 3 and its qualifying liabilities, as specified in paragraph 4.
3. The liquefiable assets of an authorized institution shall be the sum, calculated
in Hong Kong dollars, of such of the following amounts which are free from
encumbrances and freely remittable and payable- (Amended, L.N. 413187)
(a)the amount, if any, by which its total one-month liabilities to relevant
banks are exceeded by the total one-month liabilities of relevant banks to
it;
(b)currency notes and coins held by the institution in Hong Kong dollars or
in any currency freely convertible into Hong Kong dollars;
(c)repayments to the institution in respect of loans that the institution is not
committed to continue, whether by renewal or otherwise, being
repayments- (Amended, L.N. 413187)
(i) which will fall due within 1 month;
(ii) in respect of which the institution has no reason to expect any
default; and
(iii) which are not otherwise taken into account in calculating the
liquefiable assets of the institution;
(d)the amounts that the institution can realize within 1 month (after
deduction of the costs of such realization) for such of its following assets
as are available to meet any or all of its qualifying liabilities
(i) export bills maturing within 6 months, or payable after sight, and
discountable in Hong Kong dollars or in a currency freely convertible into
Hong Kong dollars;
(ii) securities that were issued, or are the subject of any guarantee or
indemnity given, by the Government or by any government approved by
the Commissioner for the purposes of this sub-paragraph;
(iii) other bills, certificates, notes, paper or debt securities which
(A) are negotiable;
(B) have a remaining term to maturity of not more than 10 years;
and
(C)are denominated and traded in Hong Kong dollars or in a
currency freely convertible into Hong Kong dollar,
except for any that are issued by a person or government specified for the
purposes of this sub-paragraph by the Commissioner by notice in writing
served upon the authorized institution;
(iv) gold.
4. The qualifying liabilities of an authorized institution shall be the sum,
calculated in Hong Kong dollars, of
(a)the amount, if any, by which the total one-month liabilities of relevant
banks to the authorized institution are exceeded by its total one-month
liabilities to relevant banks; and (Amended, L.N. 413187)
(b) the total of its other one-month liabilities.
FIFTH SCHEDULE [ss. 2(1) 135(4).]
PERPETUAL SUBORDINATED
DEBT
Issuer Month of issueAmount of issue Short title of issue
1. Bank of November USS250 millions Undated floating rate
Scotland 1985 primary capital notes.
2.Barclays June 1985 US$600 millions Undated floating rate
primary capital notes.
Issuer Month of issue Amount of issue Short title of issue
3. Barclays February 1986US$750 millions Undated floating rate
primary capital notes.
4. Hongkong August 1985US$400 millions Primary capital undated
Shanghai floating rate notes
Bank (I st series).
5. Hongkong NovemberUS$400 millionsPrimary capital undated
Shanghai 1985floating rate notes
Bank (2nd series).
6. Hongkong July 1986 US$400 millions Primary capital
undated
Shanghai floating rate notes
Bank (3rd series).
7. Kleinwort June 1985 US$100millions Perpetual floating rate
Benson notes.
8. Kleinwort April 1986US$125 millions Primary capital
undated
Benson floating rate notes
(Series 2).
9. Lloyds May 1985 US$750 millions Primary capital
undated
floating rate notes.
10. Lloyds NovemberUS$500 millionsGlobal certificate
1985 (45 Primary Capital
Sr. 2) floating rate
notes.
11.Lloyds August 1986 US$600 millions Primary capital
undated
floating rate notes
(Series 3).
12.Midland May 1985 US$750 millions Perpetual floating rate
notes.
13.Midland August 1985US$500 millions Perpetual floating rate
notes.
14.Morgan August 1986 US$200 millions Undated primary
Grenfell capital floating rate
notes.
15.National May 1985 US$500 millions Primary capital
floating
West- rate notes (Series A).
minister
16.National May 1985 US$500 millions Primary capital
floating
West- rate notes (Series B).
minister
17. National NovemberUS$500 millionsPrimary capital floating
West- 1985 rate notes (Series C).
minister
18. RoyalBank December 1985 US$350 millions Undated floating rate
of Scotland primary capital notes.
19. Standard May 1985 US$400 millions Undated primary
Chartered capital floating rate
notes.
20. Standard July 1985
Chartered capital floating rate
notes (Initial tranche
21. Standard November US5300 millions Undated primary
Chartered 1985 capital floating rate
notes (Series 2).
22. Standard December 1985 US$400 millions Undated primary
Chartered capital floating rate
notes (Series 3).
Issuer Month of issue Amount of issue Short title of issue
23. Standard June 1986 HK$80 millions Perpetual floating rate
Chartered notes.
Asia
Limited
24. Rotlischilds September US$200 millions Primary capital
undated
Continua- 1986 guaranteed floating
tion rate notes.
Finance BV
25. Midland November USS300 millions Undated floating rate
1986 primary capital notes
(Series 3).
26. Robert November USS 100 millions Primary capital
undated
Fleming 1986 guaranteed floating
Netherland rate notes.
BV
27. Standard November US$300 millions Undated primary
Chartered 1986 capital floating rate
notes (Series 4)
(Initial tranche
US$200 millions).
28. Wardley August 1987 HK$20 millions Primary capital
undated
Finance floating rate notes.
Limited
29. Bumi Daya September US$1.5 millions Perpetual floating rate
Interna- 1987 notes.
tional
Finance
Limited
(Fifth Schedule replaced, L.N. 246/86. Amended, L.N. 258/86; L.N. 274/86;
L.N. 21/87; L.N. 276/87 and L.N. 373/87)
29. Niaga March 1988 March 1988 US$1.5 Perpetual L.N. 255/88.
Finance millions floating rate
Company notes.
Limited
30. Hamburg LB August 1988 DM 18 millions Undated L.N. 272/88.
International subordinated
Limited zero coupon
notes.
31. Wa Pei July 1988 HK$9.25
millions Perpetual L.N. 285/88.
Finance floating
Company rate notes.
Limited
32. Generale August 1988 US$4 millions Perpetual L.N. 300/88.
BelPan floating
Finance rate notes.
Company
Limited
33. Amro Finance November HK $10 Perpetual L.N. 346/88.
and 1988 millions floating
Securities rate notes.
(Asia)
Limited
34. Standard November 1988 HK $30 Perpetual floating L.N. 5/89.
Chartered millions rate notes.
Finance
Limited
35. SBY Asia August 1988 US$3.5 Perpetual floating L.N. 5/89.
Limited millions rate notes.
36.BNP Inter- December 1988 US $5 Undated sub-
national millions ordinated
Financial floating
Services rate
(Hong Kong) notes.
Limited
(L.N. 66/89)
37. Chiyu Banking August 1989 HK$200 Primary capital
Corporation millions undated floating
Limited rate notes.
(L.N. 283 of 1989)
38.Standard December HK$75 Perpetual floating
Chartered 1989 millions rate note.
Finance
Limited
(Added L.N. 30 of 1990)
39. Staco International January 1990 HK$25 millions Perpetual floating rate notes.
Finance Limited
(Added L.N. 79 of 1990)
40. BNP International December 1989 US$5 millions Undated subordinated
Financial Services floating rate notes.
(Hong Kong)
Limited
(Added L.N. 79 of 1990)
Originally 27 of 1986. L.N. 246/86. L.N. 258/86. L.N. 274/86. L.N. 21/87. L.N. 276/87. 64 of 1987. L.N. 373/87. L.N. 412/87. L.N. 413/87. L.N. 199/86. Short title and commencement. Interpretation. (Cap. 50.) (Cap. 32.) (Cap. 32.) (Cap. 32.) (Cap. 32.) Fifth Schedule. (Cap. 361.) Application. (Cap. 29.) (Cap. 119.) (Cap. 32.) (Cap. 112.) (Cap. 333.) (Cap. 250.) (Cap. 66.) (Cap. 163.) (Cap. 166.) (Cap. 70.) (Cap. 32.) Banking Advisory Committee. Deposit-taking Companies Advisory Committee. Commissioner of Banking. Functions of Commissioner. Commissioner may employ assistants. Reports by Commissioner. Power of Governor to give directions. Banking business restricted to licensed banks. Restriction on business of taking deposits. Power to grant exemptions. Deposit-taking company not to take deposits less than specified sum. First Schedule. Application for banking licence. (Cap. 32.) Grant or refusal of banking licence. Amendment of conditions of banking licence. Minimum paid-up share capital for grant of banking licence. Banking licence fees. Second Schedule. Application for registration as deposit-taking company. Registration or refusal of registration of deposit-taking company. Amendment of conditions of registration. Registration fees. Second Schedule. Application for deposit-taking licence. Grant or refusal of deposit-taking licence. Deposit-taking licence fees. Second Schedule. Register of authorized institution, etc. Second Schedule. Publication of names entered in or removed from register and suspensions. Revocation of banking licence. Procedure on and effect of revocation of banking licence. Revocation of registration. Revocation of deposit-taking licence. Procedure on and effect of revocation of registration or deposit-taking licence. Interpretation. Temporary suspension of registration or deposit-taking licence in an emergency. Suspension of registration or deposit-taking licence for a period up to 6 months. Opportunity of being heard. Effect of suspension. Interpretation. Transfer of licence or registration. Application of transfer. Certificate of transfer, etc. Liabilities and privileges of transferer and transferee. Control of establishment, etc. of local branches. Fees in respect of local branches. Second Schedule. Second Schedule. Control of establishment, etc. of local representative offices. Supply of information and examination of local representative offices. Fees in respect of local representative offices. Second Schedule. (Cap. 155, 1983 Ed.) Control of establishment, etc. of overseas branches and overseas representative offices. Conditions regarding overseas branches and overseas representative offices. Fees in respect of overseas branches and overseas representative offices. Second Schedule. Powers of Commissioner. Powers of Governor in Council. Remuneration and expenses of Commissioner and others in certain cases. Examination and investigation of authorized institutions, etc. Production of authorized institution's books, etc. Control of authorized institution by the Commissioner. Authorized institution under control of Commissioner to co-operate with Commissioner. Audit. (Cap. 32.) Publication of audited balance sheet, etc. (Cap. 32.) Meetings. Commissioner may make complaint where there is misconduct, etc. by auditor. (Cap. 50.) Returns and information to be submitted to the Commissioner. Information on shareholding, etc. Alteration in constitution. Authorized institution to notify Commissioner when it ceases to take deposits. Duty to report inability to meet obligations. Examination by authorities outside Hong Kong. Amalgamation, etc. requires approval. Commissioner's approval required for exercise of certain acquired voting power. Chief executives, directors and secretaries require Commissioner's approval. (64 of 1987.) Controllers of authorized institutions require Commissioner's approval. Certain persons prohibited from acting as employees of authorized institutions except with consent of Commissioner. Appointment of chief executive. Maintenance of reserve. Maintenance of adequate provision for bad and doubtful debts and for diminution of value of assets. Minimum paid-up share capital of licensed banks. Restriction on distribution of extraordinary profits. Interpretation and application. (Cap. 29.) Advance against security of own shares, etc. Limitation on advances by authorized institutions. (Cap. 32.) Third Schedule. Third Schedule. Commissioner may publish guidelines on business practices of authorized institutions. Limitation on advances to directors, etc. of bank. Limitation on advances to directors, etc. of deposit-taking companies. Limitation on advances to employees. Powers of Commissioner where moneys placed with foreign bank. Limitation on shareholding by authorized institutions. Limitation on holding of interest in land by authorized institutions. Limitation on shareholding and holding of interest in land in the case of a registered deposit-taking company. Limitation on aggregate holdings under sections 83, 87 and 88. Proof of compliance with sections 81, 83, 84, 87, 88, 89 and 90. Offence to issue advertisements and documents relating to deposits. (Cap. 335.) Fraudulent inducement to make a deposit. Liability in tort for including persons to make a deposit in certain cases. False, etc. advertisements by authorized institution. Certain representations prohibited. Restrictions on use of title 'bank'. Capital adequacy ratio. Third Schedule. Failure to keep to capital adequacy ratio. Remedial action. Commissioner may increase capital adequacy ratio for particular authorized institutions. Liquidity ratio. Fourth Schedule. Fourth Schedule. Failure to keep to liquidity ratio. Remedial action. Commissioner may vary liquidity ratio for particular authorized institutions. Authorized institutions not to create certain charges and to notify Commissioner of certain civil proceedings. Grant of banking licence to unincorporated banks. Application for banking licence under section 107. Banking licence fee for unincorporated bank. Second Schedule. Auditor. General application of Ordinance to unincorporated banks and members. Application of sections of Ordinance to unincorporated banks. Prohibition on use of word 'bank'. Prohibition on total of deposits. Death of member of unincorporated bank. Bankruptcy of unincorporated banks. (Cap. 6.) Investigations on behalf of the Financial Secretary. Powers of the inspector and offences in connection with the investigation. Governor in Council to decide whether or not banking business or business of taking deposits is being conducted. Official secrecy. (Cap. 112.) (Cap. 50.) Disclosure of information relating to authorized institutions. Winding-up of authorized institutions. (Cap. 32.) (Cap. 32.) Offences by directors, mangers, trustees, employees and agents. Prohibition on receipt of commission by staff. Search warrants and seizures. Defence where director or manager, etc. prosecuted. Indemnity. Execution of instruments under seal. Validity of contract in contravention of this Ordinance or any Ordinance repealed by this Ordinance. Action for recovery of deposits, etc. Recovery of fees, expenses, etc. (Cap. 32.) (Cap. 6.) Use of English language. Power to specify forms. Service of documents. (Cap. 32.) Power to amend Schedules. First Schedule. Second Schedule. Third Schedule. Fourth Schedule. Fifth Schedule. Consent of Attorney General. Exclusion of provisions of Gambling Ordinance. (Cap. 148.) Interpretation. (Cap. 155, 1983 Ed.) (Cap. 328, 1983 Ed.) Appointed members of former committees to continue in office. Former Commissioner to continue in office. Authorized and employed persons to continue to be authorized and employed. Former applications for licences, etc. deemed to be applications under this Ordinance. Former licences, etc. deemed to be licences, etc. under this Ordinance. Date of payment of certain fees. Second Schedule. Conditions attached to former licences, etc. deemed to be conditions under this Ordinance. Suspension of former registration, etc. deemed to be suspension under this Ordinance. Actions, etc. under Part IV of former Banking Ordinance deemed to be actions under Part X of this Ordinance. Transitional provisions in relation to section 81. Transitional provisions in relation to section 87. Repeal. (Cap. 155, 1983 Ed.) (Cap. 328, 1983 Ed.) (Cap. 32.) (Cap. 66.)
Abstract
Originally 27 of 1986. L.N. 246/86. L.N. 258/86. L.N. 274/86. L.N. 21/87. L.N. 276/87. 64 of 1987. L.N. 373/87. L.N. 412/87. L.N. 413/87. L.N. 199/86. Short title and commencement. Interpretation. (Cap. 50.) (Cap. 32.) (Cap. 32.) (Cap. 32.) (Cap. 32.) Fifth Schedule. (Cap. 361.) Application. (Cap. 29.) (Cap. 119.) (Cap. 32.) (Cap. 112.) (Cap. 333.) (Cap. 250.) (Cap. 66.) (Cap. 163.) (Cap. 166.) (Cap. 70.) (Cap. 32.) Banking Advisory Committee. Deposit-taking Companies Advisory Committee. Commissioner of Banking. Functions of Commissioner. Commissioner may employ assistants. Reports by Commissioner. Power of Governor to give directions. Banking business restricted to licensed banks. Restriction on business of taking deposits. Power to grant exemptions. Deposit-taking company not to take deposits less than specified sum. First Schedule. Application for banking licence. (Cap. 32.) Grant or refusal of banking licence. Amendment of conditions of banking licence. Minimum paid-up share capital for grant of banking licence. Banking licence fees. Second Schedule. Application for registration as deposit-taking company. Registration or refusal of registration of deposit-taking company. Amendment of conditions of registration. Registration fees. Second Schedule. Application for deposit-taking licence. Grant or refusal of deposit-taking licence. Deposit-taking licence fees. Second Schedule. Register of authorized institution, etc. Second Schedule. Publication of names entered in or removed from register and suspensions. Revocation of banking licence. Procedure on and effect of revocation of banking licence. Revocation of registration. Revocation of deposit-taking licence. Procedure on and effect of revocation of registration or deposit-taking licence. Interpretation. Temporary suspension of registration or deposit-taking licence in an emergency. Suspension of registration or deposit-taking licence for a period up to 6 months. Opportunity of being heard. Effect of suspension. Interpretation. Transfer of licence or registration. Application of transfer. Certificate of transfer, etc. Liabilities and privileges of transferer and transferee. Control of establishment, etc. of local branches. Fees in respect of local branches. Second Schedule. Second Schedule. Control of establishment, etc. of local representative offices. Supply of information and examination of local representative offices. Fees in respect of local representative offices. Second Schedule. (Cap. 155, 1983 Ed.) Control of establishment, etc. of overseas branches and overseas representative offices. Conditions regarding overseas branches and overseas representative offices. Fees in respect of overseas branches and overseas representative offices. Second Schedule. Powers of Commissioner. Powers of Governor in Council. Remuneration and expenses of Commissioner and others in certain cases. Examination and investigation of authorized institutions, etc. Production of authorized institution's books, etc. Control of authorized institution by the Commissioner. Authorized institution under control of Commissioner to co-operate with Commissioner. Audit. (Cap. 32.) Publication of audited balance sheet, etc. (Cap. 32.) Meetings. Commissioner may make complaint where there is misconduct, etc. by auditor. (Cap. 50.) Returns and information to be submitted to the Commissioner. Information on shareholding, etc. Alteration in constitution. Authorized institution to notify Commissioner when it ceases to take deposits. Duty to report inability to meet obligations. Examination by authorities outside Hong Kong. Amalgamation, etc. requires approval. Commissioner's approval required for exercise of certain acquired voting power. Chief executives, directors and secretaries require Commissioner's approval. (64 of 1987.) Controllers of authorized institutions require Commissioner's approval. Certain persons prohibited from acting as employees of authorized institutions except with consent of Commissioner. Appointment of chief executive. Maintenance of reserve. Maintenance of adequate provision for bad and doubtful debts and for diminution of value of assets. Minimum paid-up share capital of licensed banks. Restriction on distribution of extraordinary profits. Interpretation and application. (Cap. 29.) Advance against security of own shares, etc. Limitation on advances by authorized institutions. (Cap. 32.) Third Schedule. Third Schedule. Commissioner may publish guidelines on business practices of authorized institutions. Limitation on advances to directors, etc. of bank. Limitation on advances to directors, etc. of deposit-taking companies. Limitation on advances to employees. Powers of Commissioner where moneys placed with foreign bank. Limitation on shareholding by authorized institutions. Limitation on holding of interest in land by authorized institutions. Limitation on shareholding and holding of interest in land in the case of a registered deposit-taking company. Limitation on aggregate holdings under sections 83, 87 and 88. Proof of compliance with sections 81, 83, 84, 87, 88, 89 and 90. Offence to issue advertisements and documents relating to deposits. (Cap. 335.) Fraudulent inducement to make a deposit. Liability in tort for including persons to make a deposit in certain cases. False, etc. advertisements by authorized institution. Certain representations prohibited. Restrictions on use of title 'bank'. Capital adequacy ratio. Third Schedule. Failure to keep to capital adequacy ratio. Remedial action. Commissioner may increase capital adequacy ratio for particular authorized institutions. Liquidity ratio. Fourth Schedule. Fourth Schedule. Failure to keep to liquidity ratio. Remedial action. Commissioner may vary liquidity ratio for particular authorized institutions. Authorized institutions not to create certain charges and to notify Commissioner of certain civil proceedings. Grant of banking licence to unincorporated banks. Application for banking licence under section 107. Banking licence fee for unincorporated bank. Second Schedule. Auditor. General application of Ordinance to unincorporated banks and members. Application of sections of Ordinance to unincorporated banks. Prohibition on use of word 'bank'. Prohibition on total of deposits. Death of member of unincorporated bank. Bankruptcy of unincorporated banks. (Cap. 6.) Investigations on behalf of the Financial Secretary. Powers of the inspector and offences in connection with the investigation. Governor in Council to decide whether or not banking business or business of taking deposits is being conducted. Official secrecy. (Cap. 112.) (Cap. 50.) Disclosure of information relating to authorized institutions. Winding-up of authorized institutions. (Cap. 32.) (Cap. 32.) Offences by directors, mangers, trustees, employees and agents. Prohibition on receipt of commission by staff. Search warrants and seizures. Defence where director or manager, etc. prosecuted. Indemnity. Execution of instruments under seal. Validity of contract in contravention of this Ordinance or any Ordinance repealed by this Ordinance. Action for recovery of deposits, etc. Recovery of fees, expenses, etc. (Cap. 32.) (Cap. 6.) Use of English language. Power to specify forms. Service of documents. (Cap. 32.) Power to amend Schedules. First Schedule. Second Schedule. Third Schedule. Fourth Schedule. Fifth Schedule. Consent of Attorney General. Exclusion of provisions of Gambling Ordinance. (Cap. 148.) Interpretation. (Cap. 155, 1983 Ed.) (Cap. 328, 1983 Ed.) Appointed members of former committees to continue in office. Former Commissioner to continue in office. Authorized and employed persons to continue to be authorized and employed. Former applications for licences, etc. deemed to be applications under this Ordinance. Former licences, etc. deemed to be licences, etc. under this Ordinance. Date of payment of certain fees. Second Schedule. Conditions attached to former licences, etc. deemed to be conditions under this Ordinance. Suspension of former registration, etc. deemed to be suspension under this Ordinance. Actions, etc. under Part IV of former Banking Ordinance deemed to be actions under Part X of this Ordinance. Transitional provisions in relation to section 81. Transitional provisions in relation to section 87. Repeal. (Cap. 155, 1983 Ed.) (Cap. 328, 1983 Ed.) (Cap. 32.) (Cap. 66.)
Identifier
https://oelawhk.lib.hku.hk/items/show/2707
Edition
1964
Volume
v12
Subsequent Cap No.
155
Number of Pages
117
Files
Collection
Historical Laws of Hong Kong Online
Citation
“BANKING ORDINANCE,” Historical Laws of Hong Kong Online, accessed April 26, 2025, https://oelawhk.lib.hku.hk/items/show/2707.
