THE HONG KONG ASSOCIATION OF BANKS ORDINANCE

THE HONG KONG ASSOCIATION OF BANKS ORDINANCE

LAWS OF HONG KONG

THE HONG KONG ASSOCIATION OF BANKS

ORDINANCE

CHAPTER 364





CHAPTER 364

THE HONG KONG ASSOCIATION OF BANKS ORDINANCE

ARRANGEMENT OF SECTIONS

Section.................................... Page
PART 1
PRELIMINARY
1. Short title ...........................3
2. Interpretation ........................3
PART 11
INCORPORATION, OBJECTS AND POWERS
3. Incorporation of Association ..........4
4. Objects ofthe Association .............4
5. Powers of the Association .............5
6. Bylaws ................................6
PART 111
MEMBERSHIP OF THE ASSOCIATION, COMMITTEE
AND CONSULTATIVE COUNCIL
7. Membership of Association .............7
8. Committee .............................7
9. Consultative Council ..................8
10. Designated representatives of members .8

.PART
IV

GENERAL

11................Functions of the Committee ...................................................... 9

12...................Rules as to conduct of business of banking 9
13..............................Appointment of staff 10
14......................Function of the Consultative Council 10
15......................Meetings ofthe Consultative Council 11

PART V
DISCIPLINARY
PROCEEDINGS

16................Disciplinary Committee .1 11

17............................Disciplinary provisions 11
18.......Powers of Disciplinary Committee with regard to obtaining evidence 12
19..............................Legal representation 12

20......................Powers of Disciplinary Committee i 12

21......................Disciplinary powers ofthe Committee 13





Section Page
PART VI
TRANSITIONAL

22. Transfer of assets and liabilities ..13
23. Other transitional provisions .......14
24. Consequential amendment of other enactments 14

Schedule .........................................................................................
............................................... 14





CHAPTER 364

THE HONG KONG ASSOCIATION OF BANKS

To provide for the incorporation of The Hong Kong Association of Banks, for the
corporation to assume the functions and to take over the assets and liabilities
of The Exchange Banks' Association, Hong Kong and for matters incidental
thereto and connected therewith.

[12Januaryl9811 L.N. 9 of 1981

Originally 76 of 1980 - R. Ed. 1980, 22 of 1982, L.N. 144 of 1983, 76 of 1984, 27 of 1986, L.N.
132 of 1989, L.N. 333 of 1989 , 4-Ilfo

PART 1

PRELIMINARY

1. Short title

This Ordinance may be cited as The Hong Kong Association of Banks

Ordinance.

2. Interpretation

In this Ordinance, unless the context otherwise requires-

'Association' means The Hong Kong Association of Banks incorporated by
section 3;

'business of banking' means any of the activities or functions of a licensed bank;

'Committee' means the Committee established by section 8;

'Consultative Council' means the Consultative Council established by section 9;

-continuing members- means the continuing members under section 8(1)(a);

'deposit' means a loan of money at interest or repayable at a premium or repayable
with any consideration in money or money's worth;

'Disciplinary Committee' means the Disciplinary Committee appointed under
section 16;

'Exchange Banks' Association' means the unincorporated body known as The
Exchange Banks' Association, Hong Kong existing immediately before the
commencement of this Ordinance;





'licensed bank' means a bank licensed under section 16 or 107 of the Banking
Ordinance(Cap. 155); (Amended 27 of 1986s.137)

'member' means a member of the Association;

'Secretary' means the secretary of the Association appointed pursuant to section
13.

PART 11

INCORPORATION, OBJECTS AND
POWERS

3. Incorporation of Association

(1) There is hereby established a body corporate to be known as The Hong
Kong Association of Banks.

(2) The Association shall have perpetual succession and shall be capable of
suing and being sued and of doing and suffering all such other acts or things as
bodies corporate may lawfully do and suffer.

(3) The Association shall have a common seal which shall not be affixed except
pursuant to a resolution of the Committee (or of a sealing subcommittee appointed
by the Committee for that purpose) and in the presence of 2 members of the
Committee and of the Secretary, or some other person appointed in his place by the
Committee, each of whom shall sign his name.

(4) Any document purporting to be a document duly executed under the seal of
the Association authenticated in accordance with subsection (3) shall be received
in evidence and shall, until the contrary is proved, be deemed to be a document so
executed.

4. Objects of the Association

The objects of the Association shall be

(a) to further the interests of licensed banks;

(b)to make rules from time to time for the conduct of the business of
banking;

(c)to consider, investigate and inquire into all matters and questions
connected with or relating to the business of banking;

(d)to promote, consider, support, oppose, make representations as to
and generally deal with any law affecting or likely to affect the
business of banking;

(e)to collect, circulate and disseminate information relating to the
business of banking or otherwise likely to be of interest to members
and others;

to represent its members at and appear before any public body,
committee or inquiry or before any court or tribunal;





(g)to act as an advisory body to its members and to co-operate and
maintain relations with other bodies and organizations in all matters
touching or concerning the business of banking;

(h)to provide a meeting place or places for its members and to adopt
such means of publicizing or making known its activities and
information and opinions on matters touching or concerning the
business of banking as may be thought fit;

(i)to provide or procure, by means of a management agreement or
otherwise, facilities for the clearing of cheques and other
instruments, and for the processing of banking transactions
presented by members;

(j)to establish, subsidize, support, co-operate with or otherwise assist
any person engaged in any artistic, cultural, benevolent, charitable,
welfare or similar activity and to contribute money for and to take
part in any such activities as the Committee may think fit;

(k)to do or cause to be done all such other acts and things as may
conduce to the progress, prosperity and advancement of the general
body of members.

5. Powers of the Association

The Association shall have power to do all such things as are necessary for, or
incidental to or conducive to, the carrying out of the objects of the Association and
may in particular, but without prejudice to the generality of the foregoing--

(a)acquire, take on lease, purchase, hold and enjoy any property, and
sell, let or otherwise dispose of the same;

(b) enter into any contract;

(c)invest funds in securities, place funds on deposit and otherwise deal
with its funds in such manner as it may think fit, and realize the same
at such times as it may consider necessary;

(d)borrow or otherwise raise money on such security as may be
necessary, and for that purpose charge all or any part of the property
of the Association;

(e)act as trustee in relation to pension and retirement schemes for its
employees and funds for scholarships and prizes;

institute, conduct, defend, compound or abandon any legal
proceedings by or against it or otherwise concerning its affairs;

(g) refer any claim or demand by or against it to arbitration;

(h)make and give receipts, releases and other discharges for money
payable to and for claims and demands of the Association;

(i)publish periodicals, booklets or other written material and produce or
sponsor the production of documentary films or





audio-visual material, and distribute the same by sale, loan, hire or
otherwise, with or without charge, as it shall think fit;

(j)accept gifts, donations or testamentary dispositions upon such
conditions as it shall determine.

6. Bylaws

(1) The Association may, under its common seal, make such bylaws not
inconsistent with this Ordinance as are necessary for, or incidental to or conducive
to, the carrying out of the objects of the Association and may in particular, but
without prejudice to the generality of the foregoing, make bylaws for

(a)meetings of the Association and the procedure at and the conduct
of such meetings;

(b)meetings of the Committee and its subcommittees and the procedure
at and conduct of such meetings;

(c)the procedure for election of members of the Committee as provided
in section 8(1)(b);

(d)the procedure for election of members of the Consultative Council as
provided in section 9(1)(b);

(e)entrance fees and subscriptions for membership of the Association;

control of funds of the Association;

(g)the keeping of proper accounts of the Association and records in
relation thereto and the preparation of annual accounts;

(h)the appointment of auditors and the audit of the accounts of the
Association;

(i)the enforcement of the provisions of section 21(4) or of any bylaws
made hereunder.

(2) (a)A bylaw under subsection (1) may be made only by an affirmative
vote of not less than two-thirds of the members present and voting
at a meeting of the Association convened for that purpose and
notified in accordance with paragraph (b).

(b)Notice of such meeting and of the resolutions to be proposed
thereat shall be delivered, or sent by registered post or recorded
delivery, to every member at its registered office or principal place of
business in Hong Kong not less than 21 days before the date fixed
for the meeting, but the non-receipt of such a notice by any member
shall not invalidate the proceedings thereat.

(3) Bylaws made under subsection (1)

(a) shall be subject to, and shall not derogate from, any other law;

(b) shall be subject to the approval of the Governor in Council.





PART 111

MEMBERSHIP OF THE ASSOCIATION, COMMITTEE AND CONSULTATIVE
COUNCIL

7. Membership of Association

(1) Every licensed bank which is so required by a condition attached to its
licence shall become a member of the Association and shall, subject to this section,
remain a member of the Association unless expelled under section 21(1)(d); and
membership of the Association shall be restricted to licensed banks.

(2) A member which ceases to be a licensed bank shall ipso facto cease to be a
member of the Association.

(3) A member shall not be expelled from membership of the Association
without the prior approval of the Governor in Council.

8. Committee

(1) There shall be a Committee of the Association which shall comprise

(a) 3 continuing members which shall be

(i) the Bank of China;

(ii) Standard Chartered Bank; (Amended 76 of 1984 s. 2)

(iii)The Hongkong and Shanghai Banking Corporation Limited;
(AmendedL.N. 333 of 1989)

(b) 9 elected members which shall be elected in accordance with the

bylaws of the Association and which shall be, and be elected,-

(i) as to 4 members, by those members whose place of
incorporation is Hong Kong or which are licensed under
section 107 of the Banking Ordinance (Cap. 155);
(Amended 27 of 1986 s. 137)

(ii)as to 5 members, by those members whose place of
incorporation is outside Hong Kong.

(2) The 3 continuing members referred to in subsection (1)(a) shall, subject to
subsection (3), hold office in perpetuity.

(3) Any member of the Committee which ceases for any reason to be a member
of the Association shall ipso facto cease to be a member of the Committee.

(4) There shall be a Chairman and Vice-Chairman of the Committee and these
offices shall be held alternately by Standard Chartered Bank and The Hongkong and
Shanghai Banking Corporation Limited. (Amended76of 1984 s. 2; L.N. 333 of 1989)

(5) The periods of office for the Chairman and the Vice-Chairman shall in each
case be 2 years:





Provided that Standard Chartered Bank shall hold office as Chairman and The
Hongkong and Shanghai Banking Corporation Limited shall hold office as Vice-
Chairman until 31 December 1980 and with effect from 1 January 1981 The
Hongkong and Shanghai Banking Corporation Limited and Standard Chartered
Bank shall hold office as Chairman and Vice-Chairman respectively. (Amended 76 of
1982 s. 2; L.N. 333 of 1989)

9. Consultative Council

(1) There shall be a Consultative Council of the Association which shall
comprise

(a) the 3 continuing members; and

(b)the number of elected members provided for in the Schedule which
members shall be elected in accordance with the bylaws of the
Association and which shall be, and be elected by, members
incorporated or, in the case of unincorporated members, having their
principal place of business, in various regions of the world as
provided in the Schedule.

(2) The Chairman and the Vice-Chairman for the time being of the Committee
pursuant to section 8(4) and (5) shall ex officio be the Chairman and the Vice-
Chairman respectively of the Consultative Council.

(3) The Governor in Council may, by order published in the Gazette, amend the
Schedule.

(4) Where the Schedule is amended pursuant to subection (3) any variation in
the number of elected members required, or the regions from which such members
are to be elected, shall take effect from the date of the next following meeting to
elect members of the Consultative Council.

10. Designated representatives of members

(1) Every member of the Association shall designate in writing in a manner
acceptable to the Committee a full time employee of that member holding a
managerial post who shall, subject to subsection (2), as representative of that
member--- (Amended 22 of 1982 s. 2)

(a) attend and vote at meetings;

(b) hold office;

(c) execute documents,

and otherwise act for and on behalf of the member for the purposes of this
Ordinance and bylaws made hereunder.

(2) (a)If the designated representative is for any reason unable to attend
any general meeting of members or any meeting of the Disciplinary
Committee or otherwise to act, the member may designate, in the
manner specified in subsection (1), an alternate





representative who shall have the powers and functions of the
designated representative.

(b)A member may be represented at any meeting of the Committee or of
the Consultative Council or of any sub-committee, other than the
Disciplinary Committee, by any person employed by the member in a
managerial capacity and nominated in a manner acceptable to the
chairman of such meeting, and such person may attend and vote on
behalf of that member at any such meeting and shall be deemed for
the purposes of such meeting to have the powers and functions of
the designated representative. (Replaced 22 of 1982 s. 2)

(3) Every designation may be withdrawn and replaced by a new designation in
writing at any time.

PART IV

GENERAL

11. Functions of the Committee

(1) The management of the Association shall be vested in the Committee and
all the powers of the Association shall be vested in and exercisable by the
Committee except so far as this Ordinance or any bylaws made hereunder otherwise
authorize.

(2) The Committee may appoint subcommittees for the better discharge of its
functions under this Ordinance and may delegate to any subcommittee any of its
powers and functions:

Provided that the Committee shall not delegate to any subcommittee the power
to impose penalties for breach of any rule made by the Committee pursuant to
section 12.

(3) The Committee may in its discretion co-opt any member of the Association
to be a member of any subcommittee other than the Disciplinary Committee.

12. Rules as to conduct of business of banking

The Committee may, after such consultation with the Financial Secretary as he
shall consider appropriate, from time to time make such rules relating to the conduct
of the business of banking as do not derogate from any law and may in particular,
but without prejudice to the generality of the foregoing, make rules

(a)as to the maximum rates of interest, return, discount or other benefit
which may be paid or granted by members, or by any specified
category of members, in respect of





(i) specified Hong Kong dollar deposits of their customers; (ii)
specified instruments;

(b)as to the conduct of foreign exchange business and the minimum
commissions and charges to be applied therefor;

(c)as to the conduct of securities and safe custody business and the
minimum commissions and charges to be applied therefor;

(d)as to the minimum charges to be applied by members for the
issuance of guarantees or other documents;

(e)as to any other charges relating to the provision of any banking
service, not being charges by way of interest or return payable on
loans or advances granted by members;

prohibiting members from transacting any specified type of business
or using any particular type of instrument.

(2) Rules made by the Committee pursuant to subsection (1)

(a) may be amended by the Committee at any time;

(b)shall be binding on each member upon being served on the member
as provided in subsection (3);

(c)shall not be subsidiary legislation, rules, regulations or bylaws
within the meaning of those words in the Interpretation and General
Clauses Ordinance (Cap. 1) including sections 20 and 34 thereof.

(3) Rules made under subsection (1) or amended under subsection (2) shall be
delivered, or sent by registered post or recorded delivery, to every member at its
registered office or principal place of business in Hong Kong and service shall be
deemed to have been effect upon delivery or 48 hours after the time of posting as
the case may be.

13. Appointment of stalf

(1) The Committee shall appoint a Secretary and may appoint other officers,
servants and agents at such remuneration and upon such terms and conditions of
appointment as it thinks fit.

(2) The Committee may grant, or make provision for the grant of pensions,
gratuities and retirement or other benefits to employees of the Association.

14. Function of the Consultative Council

The function of the Consultative Council shall be to advise the Committee on
any matter relating to the business of banking which

(a) is referred to it by the Committee;

(b) it chooses to consider;





(c) it is requested, by a notice in writing signed by not less than 50
members, to consider with a view to advising the Committee.

15. Meetings of the Consultative Council

(1) Meetings of the Consultative Council shall be held at such times and places
as the Consultative Council or the Chairman thereof may from time to time appoint.

(2) The following procedural provisions shall apply to every meeting of the
Consultative Council

(a) 15 members shall form a quorum;

(b)the Chairman, or in his absence the Vice-Chairman, shall preside or if
both are absent the members shall appoint one of their number to
preside.

(3) Subject to subsection (2), the Consultative Council shall regulate its own
procedure relating to its meeting and the conduct thereof.

(4) The Governor in Council may, by order published in the Gazette, amend the
number provided for in subsection (2)(a).

PART V

DiSCIPLINARY
PROCEEDINGS

16. Disciplinary Committee

The Committee shall-

(a) appoint from amongst its members a Disciplinary Committee of

4 members comprising the following(i) 2
continuing members;

(ii) 1 member whose place of incorporation is Hong Kong or
which is licensed under section 107 of the Banking
Ordinance (Cap. l55); (Amended 27 of 1986s.137)
(iii) 1 member whose place of incorporation is outside Hong
Kong; and

(b) designate one of the members of the Disciplinary Committee to

be chairman thereof.

17. Disciplinary provisions

(1) A complaint that a member has acted in breach of any rule relating to the
conduct of the business of banking made under section 12(1) shall be made in
writing to the Chairman of the Committee who shall submit the complaint to the
Committee which may, in its discretion, refer the complaint to the Disciplinary
Committee.





(2) The Committee may act on its own information in referring a complaint to
the Disciplinary Committee.

(3) The Disciplinary Committee shall notify the member in respect of which a
complaint is made of the nature of the complaint and of the date, time and place fixed
for a hearing of the complaint.

(4) The member in respect of which a complaint is made shall be entitled to
appear at the hearing and present its case.

18. Powers of Disciplinary Committee

with regard to obtaining evidence

(1) For the purposes of the hearing of a complaint the Disciplinary Committee
shall have the following powers

(a) to take evidence on oath;

(b)to summon any employee of any member to attend the hearing to
give evidence or produce any document or other thing in his
possession and to examine him as a witness;

(c)to award to a witness such expenses as, in the opinion of the
Disciplinary Committee, he has incurred by reason of his attendance.

(2) A summons to a witness shall be signed by the Chairman of the
Disciplinary Committee.

19. Legal representation

At the hearing of a complaint

(a)a member selected for the purpose by the Disciplinary Committee or
a solicitor or counsel on its behalf shall present the case against the
member in respect of which the complaint is made;

(b)the member in respect of which the complaint is made shall be
entitled to be represented by a solicitor or counsel.

20. Powers of Disciplinary Committee

If, after due inquiry, the Disciplinary Committee is satisfied that a complaint
under section 17 is proved, the Disciplinary Committee may recommend to the
Committee that it should impose or procure to be imposed on the member in respect
of which a complaint is made any of the penalties referred to in section 21:

Provided that no such recommendation shall be made by the Disciplinary
Committee unless the decision to make the recommendation is by an affirmative
vote of not less than three quarters of the members of the Disciplinary Committee
present and voting at the inquiry at which such recommendation is made.





21. Disciplinary powers of the Committee

(1) The Committee may, following a recommendation by the Disciplinary
Committee, in its discretion impose or procure to be imposed on a mamber any of
the following penalties for breach of any rule made pursuant to section 12(1)

(a) a reprimand;

(b)after consultation with the Financial Secretary, the suspensidn of
membership for any period not exceeding 3 months;

(c)after consultation with the Financial Secretary, the suspension of
facilities for the clearing of cheques and other instruments of a
member for any period not exceeding 3 months;

(d)with the approval of the Governor in Council, the expulsion of a
member from membership of the Association:

Provided that any decision to impose or procure the imposition of any penalty
shall be made by an affirmative vote of not less than three quarters of the members
of the Committee present and voting at the meeting at which such decision is taken.

(2) No appeal shall lie against the decision of the Committee to impose or
procure to be imposed any penalty pursuant to subsection (1).

(3) Where a penalty is imposed pursuant to subsection (1), the Committee

(a)may cause notice of the imposition of such penalty to be published
in the Gazette;

(b)shall give written notice to the Financial Secretary of such action and
the reasons therefor.

(4) Where the Committee, after consultation with the Financial Secretary,
suspends or procures the suspension of clearing facilities pursuant to subsection
(1)(c) then whilst such suspension is in force no member shall act as sub-clearer for
the member whose clearing facilities have been so suspended.

PART VI

TRANSITIONAL

22. Transfer of assets and liabilities

(1) All property of whatever kind and whether movable or immovable vested in or
belonging to the Exchange Banks' Association immediately before the
commencement of this Ordinance is as from such commencement transferred to and
vested in the same interest in the Association without any further assurance and
the Association shall have all powers necessary to take possession of, recover and
obtain the benefit of such property.





(2) All rights, obligations and liabilities of the Exchange Banks' Association
immediately before the commencement of this Ordinance are as from such
commencement the rights, obligations and liabilities of the Association and the
Association shall have all necessary powers to exercise or discharge the same.

23. Other transitional provisions

(1) Every licensed bank which immediately before the commencement of this
Ordinance holds office as a member of the general committee of the Exchange Banks'
Association shall, as from the commencement of this Ordinance, be a member of the
Committee of the Association for the purposes of this Ordinance until the
conclusion of the first annual general meeting of members which shall be convened
as soon as practicable after the coming into force of bylaws made under section 6(1)
relating to the convening of meetings of the Association.

(2) Where anything has been commenced by or under the authority of the
Exchange Banks' Association before the commencement of this Ordinance such
thing may be carried on and completed by, or under the authority of, the
Association.

24. Consequential amendment of other enactments

In any enactment containing reference to the Exchange Banks' Association or
the Hong Kong Exchange Banks' Association or words to the like effect, there shall
be substituted for such reference a reference to The Hong Kong Association of
Banks.

SCHEDULE [s. 91

Place of incorporation or principal place ofNumber of members of the Consultative
business of member Council to be elected by members
incorporated in or, in the case of
unincorporated members, having their
principal place of business in, that region
Belgium, France, The Federal Republic of Germany, 4
Italy, The Netherlands, The Republic of Ireland,
Spain, United Kingdom
Austria, Norway, Sweden, Switzerland 1
India, Iran, Malaysia, Pakistan, Thailand 1
Australia, Indonesia, New Zealand, The Philippines 1
Korea, Singapore 1
The People's Republic of China 2
Hong Kong 5
Japan 3
Canada, United States of America 3

Total number of elected members 21

(Replaced L.N. 132 of 1989)

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