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BANKING ORDINANCE

BANKING ORDINANCE (CHAPTER 155) CONTENTS Section PART I PRELIMINARY 1. Short title 2. Interpretation 3. Application PART II APPOINTMENTS, FUNCTIONS OF MONETARY AUTHORITY, REPORTS BY MONETARY AUTH ORITY AND POWER OF GOVERNOR TO GIVE DIRECTIONS 4. Banking Advisory Committee 5. Deposit-taking Companies Advisory Committee 6. (Repealed) 7. Functions of Monetary Authority 8. (Repealed) 9. Reports by Monetary Authority 10. Power of Governor to give directions PART III BANKING BUSINESS AND BUSINESS OF TAKING DEPOSITS TO BE CARRIED ON BY AUTHORIZEDINSTITUTIONS ONLY 11. Banking business restricted to licensed banks 12. Restriction on business of taking deposits 13. Power to grant exemptions 14. Deposit-taking company not to take deposits less than specified sum PART IV LICENSING AND REGISTRATION OF AUTHORIZED INSTITUTIONS AND KEEPING OF REGISTER 15. Application for banking licence 16. Grant or refusal of banking licence 17. Amendment of conditions of banking licence 18. Minimum paid-up share capital for grant of banking licence 19. Banking licence fees 20. Application for registration as deposit-taking company 21. Registration or refusal of registration of deposit-taking company 22. Amendment of conditions of registration 23. Registration fees 24. Application for restricted banking licence 25. Grant or refusal of restricted banking licence 26. Restricted banking licence fees 26A. Effect of grant of licence to or registration of existing authorized institution, etc.

27. Register of authorized institutions, etc.

28. Publication of names entered in or removed from register and suspensions PART V REVOCATION OF LICENCE OR REGISTRATION OF AUTHORIZED INSTITUTION 29. Revocation of banking licence 30. Procedure on and effect of revocation of banking licence 31. Revocation of registration 32. Revocation of restricted banking licence 33. Procedure on and effect of revocation PART VI SUSPENSION OF DEPOSIT-TAKING COMPANY AND RESTRICTED LICENCE BANK 34. Interpretation 35. Temporary suspensions 36. Suspensions 37. Opportunity of being heard 38. Effect of suspension PART VII TRANSFER OF LICENCE OR REGISTRATION OF AUTHORIZED INSTITUTIONS 39. Interpretation 40. Transfer of licence or registration 41. Application for transfer 42. Certificate of transfer, etc.

43. Liabilities and privileges of transferee and transferee PART VIII LOCAL BRANCHES, LOCAL REPRESENTATIVE OFFICES AND FEES 44. Control of establishment, etc. of local branches 45. Fees in respect of local branches 46. Control of establishment, etc. of local representative offices 47. Supply of information and examination of local representative offices 48. Fees in respect of local representative offices PART IX OVERSEAS BRANCHES, OVERSEAS REPRESENTATIVE OFFICES AND FEES 49. Control of establishment, etc. of overseas branches and overseas representative offices 50. Conditions regarding overseas branches and overseas representative offices 51. Fees in respect of overseas branches and overseas representative offices PART X POWERS OF CONTROL OVER AUTHORIZED INSTITUTIONS 52. Powers of Monetary Authority 53. Powers of Governor in Council 54. Remuneration and expenses of Monetary Authority and others in certain cases 55. Examination and investigation of authorized institutions, etc.

56. Production of authorized institution's books, etc.

57. Control of authorized institution by the Monetary Authority 58. Authorized institution under control of Monetary Authority to co- operate with Monetary Authority PART XI AUDITS AND MEETINGS 59. Audit 59A. Notification in respect of auditors 60. Publication of audited balance sheet, etc.

61. Communication by auditor with Monetary Authority 62. (Repealed) PART XII DISCLOSURE OF INFORMATION BY AUTHORIZED INSTITUTIONS 63. Returns and information to be submitted to the Monetary Authority 64. Information on shareholding, etc.

65. Alteration in constitution 66. Authorized institution to notify Monetary Authority when it ceases to take deposits 67. Duty to report inability to meet obligations 68. Examination by authorities outside Hong Kong PART XIII OWNERSHIP AND MANAGEMENT OF AUTHORIZED INSTITUTIONS 69. Amalgamation, etc. requires approval 70. Provisions applicable to persons proposing to become controllers of authorized institutions incorporated in Hong Kong 70A. Objection to existing controllers 70B. Restrictions on and sale of shares 70C. Prohibition on certain persons acting as indirect controllers 70D. Punishment for attempted evasion of restrictions 71. Chief executives and directors require Monetary Authority's approval 72. (Repealed) 72A. Monetary Authority may require specified persons to submit information 73. Certain persons prohibited from acting as employees of authorized institutions except with consent of Monetary Authority 74. Appointment of chief executive PART XIV 75-78. (Repealed) PART XV LIMITATIONS ON LOANS BY AND INTERESTS OF AUTHORIZED INSTITUTIONS 79. Interpretation and application 79A. Monetary Authority may require provisions of this Part to apply to certain authorized institutions on a consolidated basis 80. Advance against security of own shares, etc.

81. Limitation on advances by authorized institutions 82. Monetary Authority may publish guidelines on business practices of authorized institutions 83. Limitation on advances to directors, etc. of bank 84. (Repealed) 85. Limitation on advances to employees 86. Powers of Monetary Authority where moneys placed with foreign bank 87. Limitation on shareholding by authorized institutions 88. Limitation on holding of interest in land by authorized institutions 89. (Repealed) 90. Limitation on aggregate holdings under sections 83, 87 and 88 91. Proof of compliance with section 80, 81, 83, 85, 86, 87, 88 or 90 PART XVI ADVER TISEMENTS, REPRESENTATIONS AND USE OF TITLE "BANK" 92. Offence to issue advertisements and documents relating to deposits 93. Fraudulent inducement to make a deposit 94. Liability in tort for inducing persons to make a deposit in certain cases 95. False, etc. advertisements by authorized institution 96. Certain representations prohibited 97. Restrictions on use of title "bank" 97A. False statements as to authorized status PART XVII CAPITAL ADEQUACY RATIO OF AUTHORIZED INSTITUTIONS 98. Capital adequacy ratio 99. Failure to keep to capital adequacy ratio 100. Remedial action 101. Monetary Authority may increase capital adequacy ratio for particular authorized institutions PART XVIII LIQUIDITY RATIO OF AUTHORIZED INSTITUTIONS AND MATTERS AFFECTING LIQUIDITY RATIO 102. Liquidity ratio 103. Failure to keep to liquidity ratio 104. Remedial action 105. Monetary Authority may vary liquidity ratio for particular authorized institutions 106. Authorized institutions not to create certain charges and to notify Monetary Authority of certain civil proceedings PART XIX 107-116. (Repealed) PART XX INVESTIGATIONS OF AUTHORIZED INSTITUTIONS 117. Investigations on behalf of the Financial Secretary 118. Powers of the inspector and offences in connection with the investigation PART XXI MISCELLANEOUS 119. Governor in Council to decide whether or not banking business or business of taking deposits is being conducted 120. Official secrecy 121. Disclosure of information relating to authorized institutions 122. Winding-up of authorized institutions 123. Offences by directors, managers, trustees, employees and agents 124. Prohibition on receipt of commission by staff 125. Search warrants and seizures 126. Defence where director or manager, etc. prosecuted 126A. Limit of time for complaint or information 127. Indemnity 128. (Repealed) 129. Validity of contract in contravention of this Ordinance or any Ordinance repealed by this Ordinance 130. Revocation or suspension not affect right 131. Recovery of fees, expenses, etc.

131A. Cost related fees to be paid into Exchange Fund 132. Use of English language 133. Power to specify forms 134. Service of documents 135. Power to amend Schedules 136. Consent of Attorney General 137. (Amendments Incorporated) 137A. Exclusion of provisions of Gambling Ordinance PART XXII TRANSITIONAL, SAVINGS AND REPEAL 138. Interpretation 139. Appointed members of former committees to continue in office 140. (Repealed) 141. Authorized and employed persons to continue to be authorized and employed 142. Former applications for licences, etc. deemed to be applications under this Ordinance 143. Former licences, etc. deemed to be licences, etc. under this Ordinance 144. Date of payment of certain fees 145. Conditions attached to former licences, etc. deemed to be conditions under this Ordinance 146. Suspension of former registration, etc. deemed to be suspension under this Ordinance 147. Actions, etc. under part IV of former Banking Ordinance deemed to be actions under Part X of this Ordinance 148. Transitional provision in relation to certain letters of comfort 148A. Transitional provisions in relation to section 87 149. Transitional provisions in relation to amendments made by Banking (Amendment) Ordinance 1990 150. Transitional provisions in relation to amendments made by Banking (Amendment) (No. 2) Ordinance 1991 151. Savings in relation to Exchange Fund (Amendment) Ordinance 1992 First Schedule Specified period and specified sums Second Schedule Fees Third Schedule Capital Adequacy Ratio Fourth Schedule Liquidity Ratio Fifth Schedule Requirements applicable to prescribed advertisements 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 L. N. 199 of 1986 Part XVII: 1 September 1988] L. N. 210 of 1988 PART I PRELIMINARY 1. Short title (1) This Ordinance may be cited as the Banking Ordinance.

(2) (Omitted as spent) 2. Interpretation (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; (c) by means of circulars, brochures, pamphlets or handbills; (d) by an exhibition of photographs or cinematography 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 Monetary Authority; (Added 64 of 1987 s. 2. Amended 82 of 1992 s. 11) "associate", in relation to a person entitled to exercise, or control the exercise of, voting power in relation to, or holding shares in, a company, means any other person in respect of whom that first-mentioned person has an agreement or arrangement, whether oral or in writing, express or implied, with respect to the acquisition, holding or disposal of shares or other interests in that company or under which they act together in exercising their voting power in relation to it; (Added 95 of 1991 s. 2) "auditor" means a professional accountant holding a practising certificate under the Professional Accountants Ordinance (Cap. 50); "authorized institution" means- (a) a bank; (Amended 3 of 1990 s. 2) (b) a restricted licence bank; or (Replaced 3 of 1990 s. 2) (c) a deposit-taking company; (Added 3 of 1990 s. 2) "authorized institution incorporated in Hong Kong" means an authorized institution incorporated in Hong Kong by or under the Companies Ordinance (Cap. 32) or any other Ordinance and any reference to a bank incorporated in Hong Kong, a deposit-taking company incorporated in Hong Kong or a restricted licence bank incorporated in Hong Kong shall be construed accordingly; (Amended 3 of 1990 s. 2) "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, a deposit-taking company incorporated outside Hong Kong or a restricted licence bank incorporated outside Hong Kong shall be construed accordingly; (Amended 3 of 1990 s. 2) "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; (Amended 43 of 1990 s. 2) "Banking Advisory Committee" means the Banking Advisory Committee established by section "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; (Amended 43 of 1990 s. 2) "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, and includes an alternate chief executive so appointed; (Amended 95 of 1991 s. 2) "company" means a body corporate- (a) incorporated under the Companies Ordinance (Cap. 32); (b) incorporated by any other Ordinance; or (c) incorporated or established outside Hong Kong; "controller", in relation to a company- (a) means, in respect of all the provisions of this Ordinance, any person who is- (i) an indirect controller; or (ii) a majority shareholder controller; and (b) includes, in respect of the provisions of Part XIII, any person who is a minority shareholder controller, of that company, and references in this Ordinance to "control" shall be construed accordingly; (Replaced 95 of 1991 s. 2) "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 (Cap. 32); (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 company registered as a deposit-taking company; (Replaced 3 of 1990 s. 2) "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; "Exchange Fund" means the Exchange Fund established under the Exchange Fund Ordinance (Cap. 66); (Added 82 of 1992 s. 11) "exercise", in relation to a function, includes perform and discharge; (Added 95 of 1991 s. 2) "former auditor" means a person who was formerly the auditor of an authorized institution or a former authorized institution; (Added 43 of 1990 s. 2) "Former authorized institution" means an institution which was formerly a bank, a restricted licence bank or a deposit-taking company; (Added 43 of 1990 s. 2) "functions" includes powers and duties; "holding company" and "subsidiary" have the same meaning as in the Companies Ordinance (Cap. 32); "indirect controller", in relation to a company, means any person 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, but does not include any person in accordance with whose directions or instructions those directors are accustomed to act by reason only that they act on advice given by him in his professional capacity; (Added 95 of 1991 s. 2) "issue", in relation to an advertisement, invitation or document, includes publish, circulate, distribute or disseminate the advertisement, invitation or document; and also includes causing the advertisement, invitation or document to be issued; (Amended 95 of 1991 s. 2) "licence", in relation to- (a) an authorized institution which is a bank, means a banking licence; and (b) an authorized institution which is a restricted licence bank, means a restricted banking licence, (Amended 3 of 1990 s. 2) 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, 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 company or a restricted licence bank, means a place of business in Hong Kong of a deposit-taking company or a restricted licence bank, other than its principal place of business in Hong Kong, at which it carries on the business of taking deposits; (Amended 3 of 1990 s. 2) "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 or a restricted licence bank; and (Amended 3 of 1990 s. 2) (c) recognized as the central bank of the place in which it is incorporated; "majority shareholder controller", in relation to a company, means any person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of, more than 50% of the voting power at any general meeting of the company or of another company of which it is a subsidiary; (Added 95 of 1991 s. 2) "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; "minority shareholder controller", in relation to a company, means any person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of, 10% or more, but not more than 50%, of the voting power at any general meeting of the company or of another company of which it is a subsidiary; (Added 95 of 1991 s. 2) "Monetary Authority" means the Monetary Authority appointed under section 5A of the Exchange Fund Ordinance (Cap. 66); (Added 82 of 1992 s. 11) "money at call" means money payable within not more than 24 hours of a demand therefor, but does not include money payable on demand; "net debit balance", in relation to a company, means the aggregate of the excess of accumulated losses over accumulated profits disclosed in the profit and loss account, and other reserves separately disclosed in the balance sheet, of the most recent audited accounts of the company; (Added 95 of 1991 s. 2) "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; "register" means the register maintained under section 27; "registered" means registered under this Ordinance; "reserves", in relation to an authorized institution, means reserves which appear in the accounts of the institution, but 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; (Added 95 of 1991 s.

2) "restricted banking licence" means a restricted banking licence granted under section 25; (Added 3 of 1990 s. 2) "restricted licence bank" means a company which holds a valid restricted banking licence; (Added 3 of 1990 s. 2) "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 the period specified in item 1 of the First Schedule or with a period of call or notice of less than such specified period; (Amended 3 of 1990 s. 2) "specified sum", in relation to- (a) a deposit-taking company, means the sum referred to in section 14 (1) (a); and (b) a restricted licence bank, means the sum referred to in section 14 (1) (b); (Amended 3 of 1990 s. 2) "Unified Exchange" has the same meaning as in the Stock Exchanges Unification Ordinance (Cap. 361); "working day" means a day other than a public holiday or a gale warning day within the manning of section 2 of the Judicial Proceedings (Adjournment During Gale Warning Days) Ordinance (Cap. 62). (Added 95 of 1991 s. 2) (Amended 3 of 1990 s. 2; 82 of 1992 s. 11) (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. Application (1) Part III 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 (Cap. 29); (b) a credit union registered under the Credit Unions Ordinance (Cap. 119); (c) a company, where such deposit is secured by a mortgage, or charge, registered or to be registered under the Companies Ordinance (Cap. 32); (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 Schedule 3 to the Inland Revenue Ordinance (Cap. 112) where such deposit is taken from a consumer; (Amended 95 of 1991 s. 2) (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 stockholder, 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 (Cap. 333) where section 84 of that Ordinance applies to such deposit, or a mutual fund corporation or unit trust authorized under section 15 of that Ordinance; (Amended 10 of 1989 s. 65) (k) a person who is registered as a dealer under the Commodities Trading Ordinance (Cap. 250) where such deposit is taken from a client in the ordinary course of his business as a dealer; (Amended 68 of 1992 s. 20) (l) a recognized clearing house within the meaning of section 2 of the Securities (Clearing Houses) Ordinance (Cap. 420), where such deposit is provided as security in relation to a marker contract within the meaning of that section; or (Added 68 of 1992 s. 20) (m) the Exchange Fund established by the Exchange Fund Ordinance (Cap.

66). (Replaced 64 of 1987 s. 3) (2) Part III 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 (Cap. 163) in the ordinary course of his business as a money lender; or (d) a pawnbroker licensed under the Pawnbrokers Ordinance (Cap. 166) in the ordinary course of his business as a pawnbroker.

(3) Notwithstanding anything in The Hongkong and Shanghai Banking Corporation Limited Ordinance (Cap. 70), this Ordinance shall apply to The Hongkong and Shanghai Banking Corporation Limited. (Amended L. N. 333 of 1989; 95 of 1991 s. 3) (4) Where there is any conflict or inconsistency between this Ordinance and The Hongkong and Shanghai Banking Corporation Limited Ordinance (Cap.

70) the provisions of this Ordinance shall prevail. (Amended L. N. 333 of 1989; 95 of 1991 s. 3) (5) An authorized institution which is incorporated or registered by or under the Companies Ordinance (Cap. 32) 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 (Cap. 32) the provisions of this Ordinance shall prevail.

PART II APPOINTMENTS, FUNCTIONS OF MONETARY AUTHORITY, REPORTS BY MONETARY AUTHORITY AND POWER OF GOVERNOR TO GIVE DIRECTIONS (Amended 82 of 1992 s. 25) 4. Banking Advisory Committee (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 Monetary Authority, 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 Financial Secretary may appoint the chairman.

(Amended 82 of 1992 s. 12) 5. Deposit-taking Companies Advisory Committee (1) There is hereby established a Deposit-taking Companies Advisory Committee for the purpose of advising the Governor upon any matter connected with this Ordinance, in particular in relation to deposit-taking companies and restricted licence banks and the carrying on of a business of taking deposits by them, 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). (Amended 3 of 1990 s. 3) (2) The Deposit-taking Companies Advisory Committee shall consist of the Financial Secretary, who shall be the chairman, the Monetary Authority, 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 Financial Secretary may appoint the chairman. (Amended 82 of 1992 s. 13) 6. (Repealed 82 of 1992 s. 14) 7. Functions of Monetary Authority (1) The principal function of the Monetary Authority under this Ordinance shall be to promote the general stability and effective working of the banking system. (Amended 82 of 1992 s. 15) (2) Without limiting the generality of subsection (1), the Monetary Authority shall-(Amended 82 of 1992 s. 25) (a) be responsible for supervising compliance with the provisions of this Ordinance; (b) take all reasonable steps to ensure that the principal places of business, local branches, overseas branches and overseas 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 financial services supervisory authorities of Hong Kong or of any place outside Hong Kong, whenever appropriate, to the extent permitted by this or any other Ordinance; and (Amended 95 of 1991 s. 4) (f) consider and propose reforms of the law relating to banking business and the business of taking deposits.

(3) The Monetary Authority 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 Ordinance, indicating the manner in which he proposes to exercise functions conferred or imposed by this Ordinance upon him. (Amended 82 of 1992 s. 25) 8. (Repealed 82 of 1992 s. 16) 9. Reports by Monetary Authority (1) The Monetary Authority 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 Monetary Authority 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 Monetary Authority 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 Monetary Authority to report to him on any matter relating to the working of this Ordinance or the activities of the office of the Monetary Authority, and the Monetary Authority 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 subsection (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.

(Amended 82 of 1992 s. 25) 10. Power of Governor to give directions (1) The Governor may give to the Financial Secretary and the Monetary Authority 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 Monetary Authority shall, in the exercise of their respective functions under this Ordinance, comply with any directions given by the Governor under this section.

(Amended 82 of 1992 s. 25) PART III BANKING BUSINESS AND BUSINESS OF TAKING DEPOSITS TO BE CARRIED ON BY AUTHORIZED INSTITUTIONS ONLY 11. Banking business restricted to licensed banks (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. Restriction on business of taking deposits (1) No business of taking deposits shall be carried on in Hong Kong except by an authorized institution.

(2) A deposit-taking company shall not take any short-term deposit in Hong Kong.

(3) A deposit-taking company shall not, without the written permission of the Monetary Authority, repay any deposit within a period of less than the period specified in item 1 of the First Schedule from the date on which the deposit was taken by the company. (Amended 82 of 1992 s. 25) (4) No deposit-taking company or restricted licence bank shall receive money on savings account.

(5) Subject to section 14, a restricted licence bank may take or hold short-term deposits.

(6) Any person who contravenes subsection (1), every director and every manager of a deposit-taking company which contravenes subsection (2), (3) or (4), and every director and every manager of a restricted licence bank which contravenes subsection (4), commits an offence and is liable- (a) on conviction upon indictment to a fine of $500,000 and to imprisonment for 5 year; 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.

(Amended 3 of 1990 s. 4) 13. Power to grant exemptions (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. Deposit-taking company not to take deposits less than specified sum (1) Subject to subsection (2) - (a) a deposit-taking company shall not take in Hong Kong any deposit from a depositor of a sum less than the amount specified in item 2 of the First Schedule; and (b) a restricted licence bank shall not take in Hong Kong any deposit from a depositor of a sum less than the amount specified in item 3 of the First Schedule. (Amended 95 of 1991 s. 5) (2) A deposit-taking company or a restricted licence bank 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 deposit-taking company or restricted licence bank, as the case may be, 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 or a restricted licence bank, the deposit-taking company or restricted licence bank, as the case may be, 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 or a restricted licence bank at a time when the specified sum is amended by being increased, the deposit-taking company or restricted licence bank, as the case may be, 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 or a restricted licence bank 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 a restricted licence bank 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 deposit-taking company or restricted licence bank, as the case may be, 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. (Amended 3 of 1990 s. 5) PART IV LICENSING AND REGISTRATION OF AUTHORIZED INSTITUTIONS AND KEEPING OF REGISTER 15. Application for banking licence (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 shall apply to the Governor in Council, through the Monetary Authority, 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. (Amended 3 of 1990 s. 6) (2) There shall be lodged with the Monetary Authority 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 (Cap. 32)), 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 Monetary Authority or the Governor in Council may require; and (b) such other documents and information as may be required by the Monetary Authority or the Governor in Council.

(3) After receiving an application for a banking licence, the Monetary Authority 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. (Amended 82 of 1992 s. 25) 16. Grant or refusal of banking licence (1) After receiving an application forwarded under section 15 and the advice of the Monetary Authority in respect thereof the Governor in Council may- (Amended 82 of 1992 s. 25) (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. Amendment of conditions of banking licence (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. Minimum paid-up share capital for grant of banking licence (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 $150,000,000 or an equivalent amount in any other approved currency.

(Amended 64 of 1987 s. 5; 3 of 1990 s. 7; 95 of 1991 s. 6) (1A) For the purposes of determining the share capital issued and paid-up of- (a) a company incorporated in Hong Kong which has made an application for a banking licence, there shall be deducted from such share capital any net debit balance; and (b) a bank incorporated in Hong Kong, there shall be deducted from such share capital any net debit balance. (Added 95 of 1991 s. 6) (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. Banking licence fees (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 to the Director of Accounting Services 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; 82 of 1992 s. 17).

20. Application for registration as deposit-taking company (1) A company which proposes to carry on a business of taking deposits as a deposit-taking company shall apply to the Monetary Authority for registration.

(2) There shall be lodged with the Monetary Authority in respect of an application for registration- (a) a copy of the memorandum and articles of association or other document constituting the company, which shall be verified in such manner as the Monetary Authority may require; and (b) such other documents and information as the Monetary Authority may require. (Replaced 3 of 1990 s. 8. Amended 82 of 1992 s. 25) 21. Registration or refusal of registration of deposit-taking company (1) Subject to subsection (2), the Monetary Authority may, on receipt of an application in accordance with section 20- (Amended 82 of 1992 s. 25) (a) register a company as a deposit-taking company subject to such conditions as he may think proper to attach thereto in any particular case; or (b) refuse to register the company as a deposit-taking company. (Replaced 3 of 1990 s. 9) (2) Without limiting the generality of the Monetary Authority's power to refuse to register a company under subsection (1), he shall refuse to register a company under that subsection if- (Amended 82 of 1992 s. 18) (a) the paid-up share capital of the company, as determined under subsection (3), is less than $25,000,000 or an equivalent amount in any other approved currency; or (b) the company does not satisfy him that it is a fit and proper body to be registered. (Replaced 3 of 1990 s. 9) (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 net debit balance; and (b) a deposit-taking company, there shall be deducted from such share capital any net debit balance. (Amended 64 of 1987 s. 7; 3 of 1990 s. 9; 95 of 1991 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 deposit-taking company shall be effected by entering in the register the relevant particulars specified in section 27 and the Monetary Authority shall notify the company in writing of the registration and date of registration. (Amended 3 of 1990 s. 9; 82 of 1992 s. 25) (6) Where the Monetary Authority refuses to register a company under subsection (2), he shall notify the company in writing of the refusal.

(Amended 82 of 1992 s. 25) (7) Any company aggrieved by the refusal of the Monetary Authority 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. (Amended 82 of 1992 s. 25) (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. Amendment of conditions of registration (1) Without limiting the generality of section 21 (1), the Monetary Authority may at any time, by notice in writing served on a 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. (Amended 3 of 1990 s. 10; 82 of 1992 s. 25) (2) Any company aggrieved by any conditions to which its registration is made subject by the Monetary Authority 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. (Amended 82 of 1992 s. 25) (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 $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.

23. Registration fees (1) A deposit-taking company shall, within 14 days after the receipt of a notice of registration under section 21 (5), pay to the Director of Accounting Services the registration fee specified in the Second Schedule.

(2) Every 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) (Amended 3 of 1990 s. 11) 24. Application for restricted banking licence (1) A company which proposes to carry on a business of taking deposits as a restricted licence bank shall apply to the Financial Secretary, through the Monetary Authority, for a restricted banking licence.

(2) There shall be lodged with the Monetary Authority in respect of an application for a restricted banking licence- (a) a copy of the memorandum and articles of association or other document constituting the company, which shall be verified in such manner as the Monetary Authority or the Financial Secretary may require; and (b) such other documents and information as may be required by the Monetary Authority or the Financial Secretary.

(3) After receiving an application for a restricted banking licence, the Monetary Authority shall forward to the Financial Secretary the application and his advice as to whether or not the applicant should be granted a restricted banking licence and, in giving that advice, the Monetary Authority shall have regard to the matters specified in section 25 (2). (Replaced 3 of 1990 s. 12. Amended 82 of 1992 s. 25) 25. Grant or refusal of restricted banking licence (1) Subject to subsection (2), the Financial Secretary may, on receipt of an application and the advice of the Monetary Authority in accordance with section 24- (Amended 82 of 1992 s. 25) (a) grant a restricted banking licence subject to such conditions as he may think proper to attach thereto in any particular case; or (b) refuse to grant a restricted banking licence.

(2) Without limiting the generality of the Financial Secretary's power to refuse to grant a restricted banking licence to a company under subsection (1), he shall refuse to grant a restricted banking licence to a company under that subsection if- (a) the share capital issued and paid-up of the company, as determined in accordance with subsection (3), is less than $ 100,000,000 or an equivalent amount in any other approved currency; or (b) the company does not satisfy him that it is a fit and proper body to be granted a restricted banking licence.

(3) For the purposes of determining the share capital issued and paid-up of- (a) a company which has made an application for a restricted banking licence, there shall be deducted from such share capital any net debit balance; and (b) a restricted licence bank, there shall be deducted from such share capital any net debit balance. (Amended 95 of 1991 s. 8) (4) The Governor in Council may, by notice in the Gazette, amend the amount of share capital issued and paid-up specified in subsection (2) (a).

(5) 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 restricted licence bank, attach to the restricted banking licence held by the restricted licence bank such conditions, or amend or cancel any conditions attached to the restricted banking licence, as he may think proper.

(6) Where the Financial Secretary refuses to grant a restricted banking licence under subsection (1) (b) to a company, he shall notify the company in writing of the refusal.

(7) Any company aggrieved by the refusal of the Financial Secretary to grant a restricted banking licence to it under subsection (1), or by the imposition by him of conditions under subsection (1) or (5), 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 restricted licence bank which contravenes any condition attached under subsection (1) (a) or (5) to its restricted 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.

(Replaced 3 of 1990 s. 12) 26. Restricted banking licence fees (1) A restricted licence bank shall, within 14 days after the grant to it of a restricted banking licence, pay to the Director of Accounting Services the restricted banking licence fee specified in the Second Schedule.

(2) Every restricted licence bank shall pay to the Director of Accounting Services annually the renewal of restricted banking licence fee specified in the Second Schedule upon the anniversary of the date of grant of the restricted banking licence. (Replaced 3 of 1990 s. 12) 26A. Effect of grant of licence to or registration of existing authorized institution, etc.

(1) Where a deposit-taking company is granted a restricted banking licence or a banking licence, it shall thereupon cease to be a deposit-taking company.

(2) Where a restricted licence bank is registered as a deposit-taking company or granted a banking licence, it shall thereupon cease to be a restricted licence bank.

(3) Where a bank is registered as a deposit- taking company or granted a restricted banking licence, it shall thereupon cease to be a bank.

(4) Where subsection (1), (2) or (3) applies to an authorized institution and- (a) prior to the date on which that subsection applied to the institution, the institution had lawfully taken a deposit, and (b) the holding of that deposit by that institution on or after that date would but for this subsection contravene any of the provisions of section 12 or 14, the institution may continue to hold until maturity that deposit and, accordingly, the holding until maturity of that deposit shall be deemed not to contravene any of the provisions of section 12 or 14.

(5) Where subsection (3) applies to an authorized institution, the institution may continue to hold, for not more than 3 months after the date on which that subsection applied to it, any money on savings account received by it prior to that date and, accordingly, the holding of that money for not more than that period shall be deemed not to contravene section 12 (4).

(Added 3 of 1990 s. 12) 27. Register of authorized institutions, etc.

(1) The Monetary Authority 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 of every bank which has a local representative office and the business address of every local representative office; (Amended 95 of 1991 s. 9) (c) the name and business address of every deposit-taking company; (d) the name and business address of every restricted licence bank; and (e) such other particulars of banks, local representative offices, deposit-taking companies or restricted licence banks as the Monetary Authority thinks fit. (Amended 3 of 1990 s. 13) (2) The register shall be kept at the office of the Monetary Authority or at such other place as may be notified by the Monetary Authority 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 Monetary Authority 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 Monetary Authority 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 Monetary Authority by a company under this Ordinance, and purporting to be certified by the Monetary Authority 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 Monetary Authority; 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 Monetary Authority, to which it refers; and (b) such document shall be prima facie evidence of all matters contained therein. (Amended 82 of 1992 s. 25) 28. Publication of names entered in or removed from register and suspensions (1) Where the name of a bank (including a bank referred to in section 27 (1) (b), deposit-taking company or restricted licence bank is entered in the register, the Monetary Authority shall publish in the Gazette notice of such entry. (Amended 3 of 1990 s. 14; 95 of 1991 s. 10) (2) Where a company ceases to be a deposit-taking company, restricted licence bank or bank by virtue of section 26A (1), (2) or (3) respectively, the Monetary Authority shall- (a) remove from the register the name of the former deposit-taking company, restricted licence bank or bank, as the case may be; and (b) publish in the Gazette notice of such removal. (Replaced 3 of 1990 s.

14) (3) Where the licence or registration of an authorized institution is revoked under this Ordinance, the Monetary Authority 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 deposit-taking company or the restricted banking licence of a restricted licence bank is suspended under this Ordinance, the Monetary Authority shall- (a) make a notation in the register against the name of the deposit-taking company or restricted licence bank concerned that its registration or restricted banking 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. (Replaced 3 of 1990 s.

14) (5) Where approval for the establishment of a local representative office is revoked under this Ordinance, the Monetary Authority shall- (a) remove from the register the name of the bank which maintained the local representative office; and (Amended 95 of 1991 s. 10) (b) publish in the Gazette notice of such removal.

(6) (Repealed 3 of 1990 s. 14) (Amended 82 of 1992 s. 25) PART V REVOCATION OF LICENCE OR REGISTRATION OF AUTHORIZED INSTI- TUTION 29. Revocation of banking licence (1) 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; (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 (iii) has failed to maintain adequate provision for depreciation or diminution in the value of its assets (including provision for bad and doubtful debts), for liabilities which will or may fall to be discharged by it and for losses which it will or may incur; or (Added 95 of 1991 s. 11) (aa) where the holder of the banking licence is incorporated in Hong Kong, if he is satisfied that the share capital issued and paid-up of the holder is less than the amount specified in section 18 (1); or (Added 95 of 1991 s. 11) (b) if- (i) where the Monetary Authority has made a report to him under section 52 (1) (D); or (Amended 82 of 1992 s. 25) (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.

(2) Without limiting the generality of subsection (1), the Governor in Council may revoke the banking licence of a bank on being requested in writing by the bank to do so, if he is satisfied that the interests of depositors of that bank are or will be adequately safeguarded. (Added 95 of 1991 s. 11) 30. Procedure on and effect of revocation of banking licence (1) Where the banking licence of a bank is revoked the Monetary Authority 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. (Amended 82 of 1992 s. 25) (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. Revocation of registration (1) Subject to section 33 (1), the Monetary Authority may revoke the registration of a deposit-taking company if- (Amended 3 of 1990 s. 15; 82 of 1992 s. 25) (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); (ba) he is satisfied that the company has failed to maintain adequate provision for depreciation or diminution in the value of its assets (including provision for bad and doubtful debts), for liabilities which will or may fall to be discharged by it and for losses which it will or may incur, (Added 95 of 1911 s. 12) (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; (ca) he is no longer satisfied that the company is a fit and proper body to be registered; (Added 3 of 1990 s. 15) (d) it appears to him that- (i) (Repealed 3 of 1990 s. 15) (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); (f) 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 Monetary Authority under section 117 (5) (e). (Amended 82 of 1992 s. 25) (2) Without limiting the generality of subsection (1), the Monetary Authority may revoke the registration of a 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 or will be adequately safeguarded. (Amended 3 of 1990 s. 15; 95 of 1991 s. 12; 82 of 1992 s. 25) (3) Any company aggrieved by the revocation by the Monetary Authority 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. (Amended 82 of 1992 s. 25) 32. Revocation of restricted banking licence (1) Subject to section 33 (1), the Financial Secretary may revoke the restricted banking licence of a restricted licence bank if- (a) the restricted licence bank- (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 share-capital issued and paid-up of the restricted licence bank is less than the amount specified in section 25 (2) (a); (Replaced 3 of 1990 s. 16) (ba) he is satisfied that the restricted licence bank has failed to maintain adequate provision for depreciation or diminution in the value of its assets (including provision for bad and doubtful debts), for liabilities which will or may fall to be discharged by it and for losses which it will or may incur, (Added 95 of 1991 s. 13) (c) the objects of the restricted licence bank as stated in its memorandum of association or constitution no longer include the object of carrying on a business of taking deposits; (ca) he is no longer satisfied that the restricted licence bank is a fit and proper body to be licensed; (Added 3 of 1990 s. 16) (d) it appears to him that- (i) (Repealed 3 of 1990 s. 16) (ii) the restricted licence bank 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 restricted licence bank, 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 restricted licence bank is being carried on in a manner detrimental to the interests of its depositors; (e) the restricted licence bank has contravened section 14 (1) or (3); (f) the restricted licence bank has failed to pay the restricted banking licence fee or renewal of restricted banking licence fee in accordance with section 26; (Replaced 3 of 1990 s. 16) (g) the restricted licence bank has failed to comply with section 60 or Part XVII or XVIII; (h) the restricted licence bank makes a report to the Monetary Authority 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 restricted licence bank is so unable or has suspended payment; (Amended 82 of 1992 s. 25) (i) he is of the opinion that, having regard to a report under section 117 in respect of the restricted licence bank, it is proper for him to do so.

(2) Without limiting the generality of subsection (1), the Financial Secretary may revoke the restricted banking licence of a restricted licence bank on being requested in writing by the restricted licence bank so to do, if he is satisfied that the interests of depositors of that restricted licence bank are or will be adequately safeguarded. (Amended 95 of 1991 s. 13) (3) Any restricted licence bank aggrieved by the revocation by the Financial Secretary of its restricted banking 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. (Amended 3 of 1990 s. 16) 33. Procedure on and effect of revocation (1) Before exercising his powers under section 31 (1) or 32 (1), the Monetary Authority or the Financial Secretary, as the case may be, shall inform the deposit-taking company or restricted licence bank concerned of the grounds therefor and give it an opportunity, within such period as the Monetary Authority or the Financial Secretary, as the case may be, may specify in writing, being a period reasonable in the circumstances, of being heard. (Amended 82 of 1992 s. 25) (2) Where the registration of a deposit-taking company or the restricted banking licence of a restricted licence bank is revoked the Monetary Authority shall notify the deposit-taking company or restricted licence bank, as the case may be, in writing of such revocation and the deposit- taking company or restricted licence bank, as the case may be, shall, on and from the date specified in that notice, cease to carry on a business of taking deposits. (Replaced 3 of 1990 s. 17. Amended 82 of 1992 s. 25) (3) Without prejudice to any other provision of this Ordinance, a deposit-taking company or a restricted licence bank referred to in subsection (2) may continue to hold until maturity any deposit taken prior to the date referred to in that subsection. (4) Subsection (2) shall not prejudice the enforcement by any person of any right or claim against the deposit-taking company or restricted licence bank or by the deposit-taking company or restricted licence bank of any right or claim against any person. (Added 3 of 1990 s. 17) (Amended 3 of 1990 s. 17) PART VI SUSPENSION OF DEPOSIT-TAKING COMPANY AND RESTRICTED LICEN- CE BANK (Amended 3 of 1990 s. 18) 34. Interpretation In this Part, "the designated authority" means the Monetary Authority in the case of a deposit-taking company, and the Financial Secretary in the case of a restricted licence bank.

(Amended 3 of 1990 s. 19; 82 of 1992 s. 25) 35. Temporary suspensions (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 or a restricted licence bank, as the case may be; and (b) the designated authority considers that urgent action is expedient, he may, by notice in writing served on the deposit-taking company or restricted licence bank- (i) suspend the registration of the deposit-taking company; or (Replaced 3 of 1990 s. 20) (ii) suspend the restricted banking licence of the restricted licence bank, (Replaced 3 of 1990 s. 20) 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 deposit-taking company or restricted licence bank, as the case may be, 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 deposit-taking company or restricted licence bank concerned 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.

(Amended 3 of 1990 s. 20) 36. Suspensions (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 or restricted licence bank, as the case may be, the designated authority may, by notice in writing served on the deposit-taking company or restricted licence bank, suspend the registration of the deposit-taking company or the restricted banking licence of the restricted licence bank 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 deposit-taking company or restricted licence bank the subject of the suspension; and (b) for a period not exceeding 6 months commencing immediately upon the expiration of the suspension.

(3) Any deposit-taking company or restricted licence bank aggrieved by the suspension by the designated authority of its registration or restricted banking 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.

(Amended 3 of 1990 s. 21) 37. Opportunity of being beard Before exercising his powers under section 36, the designated authority shall inform the deposit-taking company or restricted licence bank 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. (Amended 3 of 1990 s.

22) 38. Effect of suspension (1) Without prejudice to any other provision of this Ordinance, where the registration of a deposit-taking company or restricted banking licence of a restricted licence bank is suspended under section 35 or 36 the deposit-taking company or restricted licence bank, as the case may be, 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 of the deposit-taking company or restricted banking licence of the restricted licence bank and without a further period of suspension under this Part.

(2) Without prejudice to any other provision of this Ordinance, a deposit-taking company or restricted licence bank 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 of a deposit- taking company or the restricted banking licence of a restricted licence bank, the deposit-taking company or the restricted licence bank shall continue to be a deposit-taking company or restricted licence bank, as the case may be, for the 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 deposit-taking company or a restricted licence bank, as the case may be, under this Ordinance, during the period of its suspension. (Replaced 3 of 1990 s. 23) (Amended 3 of 1990 s. 23) PART VII TRANSFER OF LICENCE OR REGISTRATION OF AUTHORIZED INSTI- TUTIONS 39. Interpretation In this Part- "designated authority" means- (a) the Governor in Council in the case of an authorized institution which is a bank; (b) the Monetary Authority in the case of an authorized institution which is a deposit-taking company; and (Amended 82 of 1992 s. 25) (c) the Financial Secretary in the case of an authorized institution which is a restricted licence bank.

(Amended 3 of 1990 s. 24; 95 of 1991 s. 14) 40. Transfer of licence or registration (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. Application for transfer (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 Monetary Authority. (Amended 82 of 1992 s. 25) (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 for the transfer of a restricted banking licence as if that application were an application for the grant of a restricted banking licence under section 24 (1). (Replaced 3 of 1990 s. 25) (d) (Repealed 3 of 1990 s. 25) 42. Certificate of transfer, etc.

Where the designated authority grants the transfer of a licence or of registration, the Monetary Authority shall- (Amended 82 of 1992 s. 25) (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. Liabilities and privileges of transferor and transferee 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. Control of establishment, etc. of local branches (1) An authorized institution shall not establish or maintain any local branch there of without the approval of the Monetary Authority.

(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 Monetary Authority 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 local branch thereof such conditions, or amend or cancel any conditions so attached, as he may think proper.

(5) The Monetary Authority 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 Monetary Authority 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 Monetary Authority, or by any conditions to which an approval is made subject by the Monetary Authority 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 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. (Amended 82 of 1992 s. 25) 45. Fees in respect of local branches (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 commencement 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. Control of establishment, etc. of local representative offices (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 Monetary Authority.

(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 Monetary Authority 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 Monetary Authority 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 Monetary Authority 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 Monetary Authority 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 Monetary Authority, or by any conditions to which an approval is made subject by the Monetary Authority 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) Any person in charge, or who appears to be in charge, of a local representative office established or maintained in contravention 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. (Amended 82 of 1992 s. 25) 47. Supply of information and examination of local representative offices (1) A bank incorporated outside Hong Kong which maintains a local representative office thereof pursuant to section 46 shall- (a) submit to the Monetary Authority such information as he may require regarding the functions and activities of the representative office; (b) if the Monetary Authority 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. (Amended 82 of 1992 s. 25) (2) Any person who fails to comply with any requirement of the Monetary Authority under this section commits an offence and is liable- (Amended 82 of 1992 s. 25) (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 $ 50,000 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. Fees in respect of local representative offices (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 (Cap. 155, 1983 Ed.) repealed by this Ordinance, of the establishment of that local representative office.

PART IX OVERSEAS BRANCHES, OVERSEAS REPRESENTATIVE OFFICES AND FEES 49. Control of establishment, etc. of overseas branches and overseas representative offices (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 there of without the approval of the Monetary Authority.

(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 Monetary Authority 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 Monetary Authority 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 Monetary Authority 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 Monetary Authority, or by any conditions to which an approval is made subject by the Monetary Authority 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. (Amended 82 of 1992 s. 25) 50. Conditions regarding overseas branches and overseas representative offices (1) Every authorized institution incorporated in Hong Kong which maintains an overseas branch there of shall be subject to a condition that- (a) the institution shall submit to the Monetary Authority 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 Monetary Authority 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 Monetary Authority may require; (c) if the Monetary Authority 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 report prepared by, subject to subsection (2A), an auditor or auditors appointed by the institution, the institution shall submit a report as to whether or not, in the opinion of the auditor or auditors, the return or information is correctly compiled, in all material respects, from, the books and records of the overseas branch; (Amended 67 of 1992 s. 2) (d) if the Monetary Authority 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. (Amended 82 of 1992 s. 25) (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 Monetary Authority such information as he may require regarding the functions and activities of the overseas representative office; (b) if the Monetary Authority 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. (Amended 82 of 1992 s.

25) (2A) The auditor or auditors appointed by an authorized institution to prepare a report required under subsection (1) (c) shall be- (a) an auditor or auditors appointed by the institution prior to the report being so required and approved by the Monetary Authority for the purpose of preparing the report; (b) an auditor approved, or an auditor from amongst auditors nominated, by the Monetary Authority for the purpose of preparing the report after consultation with the institution; or (c) an auditor referred to in paragraph (a) and an auditor referred to in paragraph (b), as may be required by the Monetary Authority. (Added 67 of 1992 s. 2. Amended 82 of 1992 s. 25) (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. Fees in respect of overseas branches and overseas representative offices (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. Powers of Monetary Authority (1) Where- (a) an authorized institution informs the Monetary Authority- (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 Monetary Authority 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 Monetary Authority that he considers it in the public interest to do so, the Monetary Authority, 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 Monetary Authority shall not exercise the power conferred by subsection (1) (D) unless he has- (a) given to the authorized institution not less than 7 days' notice in writing (or such lesser period as is permitted under subsection (2A) stating- (i) his intention to exercise such power; and (ii) his reasons for the exercise thereof; and (b) afforded the institution an opportunity to submit to him representations in writing thereon (which representations, if any, shall form part of his report to the Governor in Council). (Replaced 67 of 1992 s. 3) (2A) The Monetary Authority may give an authorized institution less than the 7 days' notice in writing referred to in subsection (2) where- (a) he has the consent of the Financial Secretary to do so; and (b) to do so is reasonable in the circumstances.

(Added 67 of 1992 s. 3) (3) Any person aggrieved by the exercise by the Monetary Authority 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 Monetary Authority under subsection (1) (A) 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.

(Amended 82 of 1992 s. 25) 53. Powers of Governor in Council (1) Where- (a) the Monetary Authority 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 117 (5) (c), the Governor in Council may, without prejudice to the powers conferred on him, the Monetary Authority 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 Monetary Authority; (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 Monetary Authority 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. (Amended 82 of 1992 s. 25) (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. Remuneration and expenses of Monetary Authority and others in certain cases (1) The Monetary Authority, 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 Monetary Authority 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 Monetary Authority 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 Monetary Authority, 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 Monetary Authority under subsection (1) or (2) may appeal to the Governor in Council against the decision. (Amended 82 of 1992 s. 25) 55. Examination and investigation of authorized institutions, etc.

(1) Without limiting the generality of section 52, the Monetary Authority may at any time, with or without prior notice to the authorized institution, examine the books, accounts and transactions 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 Monetary Authority 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 published reserve, whichever is the greater, apply to him to make such an investigation and submit to him such evidence 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 Monetary Authority 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.
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