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BANKING ORDINANCE
BANKING ORDINANCE
(Replaced 95 of 1991 s. 27. Amended 82 of 1992 s. 25)
82. Monetary Authority may publish guidelines on business practices of
authorized institutions
(1) Without prejudice to section 7 (3) or to the other provisions of
this Part, the Monetary Authority may, after consultation with the
Financial Secretary, by notice in the Gazette from time to time publish
for the guidance of authorized institutions, guidelines, not inconsistent
with this Ordinance, specifying business practices which should not be
engaged in by authorized institutions because, in his opinion, such
business practices will or may cause the soundness of the financial
position of authorized institutions to be dependent upon the soundness of
the financial position of a single party. (Amended 82 of 1992 s. 25)
(2) For the purposes of subsection (1), guidelines given in a notice
under that subsection-
(a) may be expressed to apply to all authorized institutions or to a
class of authorized institutions specified in the notice; and
(b) may specify what constitutes a single party for the purposes of any
such guidelines and, without prejudice to the generality of that power,
any class or description of persons or business may constitute such a
single party.
(3) Where an authorized institution engages in business practices
specified in a notice under subsection (1), the Governor in Council, the
Financial Secretary or the Monetary Authority, as the case may be, may,
where he is of the opinion that the case is of sufficient importance to
justify him so doing, exercise any of his powers under Part V, VI or X in
respect of the institution. (Amended 82 of 1992 s. 25)
83. Limitation on advances to directors, etc. of bank
(1) Subject to subsection (4A), an authorized institution incorporated
in Hong Kong shall not provide any facility specified in subsection (3) to
or on behalf of any person or body specified in subsection (4) if the
aggregate amount of such facilities for the time being provided by the
institution to or on behalf of any one or more such persons or bodies
would thereby exceed 10% of the capital base of the institution. (Replaced
95 of 1991 s. 28)
(2) Subject to subsections (1) and (4A), an authorized institution
incorporated in Hong Kong shall not provide any facility specified in
subsection (3) to or on behalf of any person, being an individual,
specified in subsection (4) (a), (b), (c), (d), (e) or (f) if the
aggregate amount of such facilities for the time being provided by the
institution to or on behalf of-
(a) one or more such persons, would thereby exceed 5% of the capital
base of the institution;
(b) that person, would thereby exceed $ 1,000,000. (Replaced 95 of 1991
s. 28)
(3) Subject to subsection (3A), for the purposes of subsections (1) and
(2), the following facilities are specified- (Amended 67 of 1992 s. 7)
(a) the granting, or permitting to be outstanding, of unsecured
advances, unsecured loans or unsecured credit facilities including
unsecured letters of credit; (Amended 95 of 1991 s. 28)
(b) the giving of unsecured financial guarantees; and
(c) the incurring of any other unsecured liability.
(3A) Subsection (3) shall not include any facility to the extent to
which it has been written off, or to which specific provision has been
made for it, in the books of the authorized institution concerned. (Added
67 of 1992 s. 7)
(4) For the purposes of subsections (1) and (2), the following persons
and bodies are specified
(a) any director of the institution;
(b) any relative of any such director;
(c) any employee of the institution who is responsible, either
individually or as a member of a committee, for determining loan
applications;
(d) any relative of any such employee;
(e) any controller (other than an authorized institution, or a bank
incorporated outside Hong Kong which is not licensed under this Ordinance
but is approved by the Monetary Authority for the purposes of this
paragraph) of the institution; (Replaced 64 of 1987 s. 21. Amended 82 of
1992 s. 25)
(f) any relative of an individual who is a controller of the
institution; (Amended 67 of 1992 s. 7)
(g) any firm, partnership or non-listed company (other than a firm,
partnership or non-listed company which is an authorized institution, or a
bank incorporated outside Hong Kong which is not licensed under this
Ordinance but is approved by the Monetary Authority for the purposes of
this paragraph) in which the institution or any of its controllers or
directors or any relative of any of its controllers or directors is
interested as director, partner, manager or agent; and (Amended 82 of 1992
s. 25)
(h) any individual, firm, partnership or non-listed company of which any
controller or director of the institution or any relative of any such
controller or director is a guarantor. (Amended 95 of 1991 s. 28) (4A) The
Monetary Authority may, by notice in writing to an authorized institution,
and subject to such conditions as he may think proper to attach thereto in
any particular case, permit the institution to grant, without complying
with subsection (1) or (2), any facility specified in subsection (3) (or
such of those facilities as he specifies in the notice) to or on behalf of
any person or body specified in subsection (4) (or such of those persons
or bodies as he specifies in the notice); and where the institution, in
pursuance of such notice and in accordance with such conditions, grants
any such facility to or on behalf of any such person or body it shall not
thereby contravene subsection (1) or (2). (Added 64 of 1987 s. 21. Amended
3 of 1990 s. 34; 95 of 1991 s. 28; 82 of 1992 s. 25)
(5) The provisions of this section shall apply to a facility granted to
or on behalf of a person or body jointly with another person or body as
they apply to a facility granted to or one behalf of a person or body
severally.
(6) For the purposes of subsections (2) and (4), a facility granted to
or on behalf of any firm, partnership or non-listed company which a person
specified in subsection (4) (a), (b), (c), (d), (e) or (f) is able to
control, shall be deemed to be granted to that person or on his behalf.
(7) Every director and every manager of an authorized institution which
contravenes subsection (1) or (2) commits an offence and is liable-
(Amended 95 of 1991 s. 28)
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years and, in the case of a continuing offence, to a
further fine of $ 10,000 for every day during which the offence continues;
or
(b) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months and, in the case of a continuing offence, to a further fine of
$ 5,000 for every day during which the offence continues.
84. (Repealed 95 of 1991 s. 29)
85. Limitation on advances to employees
(1) An authorized institution shall not provide to any one of its
employees any facility specified in subsection (2) to an aggregate amount
of such facilities in excess of one year's salary for the employee.
(Amended 95 of 1991 s. 30)
(2) For the purposes of subsection (1) the following facilities are
specified-
(a) the granting, or permitting to be outstanding, of unsecured
advances, unsecured loans or unsecured credit facilities including
unsecured letters of credit; (Amended 95 of 1991 s. 30)
(b) the giving of unsecured financial guarantees; and
(c) the incurring of any other unsecured liability.
(3) Every director and every manager of an authorized institution which
contravenes this section commits an offence and is liable-
(a) on conviction upon indictment to a fine of $ 100,000 and to
imprisonment for 12 months; or
(b) on summary conviction to a fine of $ 50,000 and to 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.
86. Powers of Monetary Authority where moneys placed with foreign bank
(1) Where the Monetary Authority-
(a) has reason to believe that an authorized institution has granted to
any foreign bank any advances, loans (whether by way of deposit or
otherwise) or credit facilities; and
(b) is of the opinion that the extent or manner in which such advances,
loans or credit facilities have been made is not in the interests or the
depositors of the authorized institution,
he may, by notice in writing to the institution, exercise his powers under
this section.
(2) A notice under this section may-
(a) prohibit the authorized institution from granting, after the date of
the service of the notice, any advances, loans or credit facilities to the
foreign bank specified in the notice and any other foreign bank so
specified which the Monetary Authority has reason to believe is associated
with the first-mentioned foreign bank;
(b) where any moneys are held at call, demand or notice by the
authorized institution with any bank specified by the Monetary Authority
in pursuance of his powers under paragraph (a), direct the institution
forthwith to demand repayment of such moneys in accordance with the terms
upon which they are held;
(c) prohibit the authorized institution from permitting to be
outstanding with any bank specified by the Monetary Authority in pursuance
of his powers under paragraph (a)-
(i) any moneys which should have been repaid to the institution by
virtue of a direction under paragraph (b);
(ii) any advances, loans or credit facilities repayable or terminable
upon the elapse of any time or the occurrence of any event, after the
elapse of such time or the occurrence of such event.
(3) A requirement under subsection (2) (a) shall not prohibit the grant
of any advance or loan after the date of service of the notice in
pursuance of any agreement entered into prior to such date unless the
Monetary Authority otherwise directs; but it shall be the duty of the
authorized institution to notify the Monetary Authority of any relevant
agreement within 7 days of the receipt by it of a notice under this
section.
(4) In this section-
"foreign bank" means-
(a) any bank incorporated outside Hong Kong which is not licensed under
this Ordinance;
(b) any undertaking of an authorized institution, including that of the
institution to which notice is given under this section, which is situated
outside Hong Kong.
(5) Every director and every manager of an authorized institution which
fails without reasonable excuse to comply with any requirement of the
Monetary Authority in the exercise of his powers under this section
commits an offence and is liable-
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years and, in the case of a continuing offence, to a
further fine of $ 10,000 for every day during which the offence continues;
or
(b) on summary conviction to a fine of $ 50,000 and to 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.
(Amended 82 of 1992 s. 25)
87. Limitation on shareholding by authorized institutions
(1) Subject to subsection (2), an authorized institution incorporated in
Hong Kong shall not acquire or hold any part of the share capital of any
other company or companies to an aggregate value in excess of 25 per cent
of the capital base of the institution, except such share capital as the
institution may hold as security for facilities granted by it or acquire
in the course of the satisfaction of debts due to it: (Amended 64 of 1987
s. 23; 95 of 1991 s. 31)
Provided that all share capital acquired in the course of the
satisfaction of debts due to it shall be disposed of at the earliest
suitable opportunity, and in any event not later than 18 months after the
acquisition thereof or within such further period as the Monetary
Authority approves in writing in any particular case.
(2) Subsection (1) shall not apply-
(a) where an authorized institution acquires or holds any part of the
share capital of any company or companies under an underwriting or
subunderwriting contract for a period not exceeding 7 working days, or
such further period as the Monetary Authority approves in writing, and
subject to such conditions as he may think proper to attach thereto, in
any particular case; (Amended 95 of 1991 s. 31)
(b) to any holding, approved in writing by the Monetary Authority, of
share capital in-
(i) another authorized institution; or
(ii) a company carrying out nominee, executor or trustee functions, or
other functions related to banking business, the business of taking
deposits, insurance business, investments or other financial services; or
(Replaced 95 of 1991 s. 31)
(c) to any holding, approved in writing by the Monetary Authority, of
share capital which is deducted in determining the capital base of the
authorized institution. (Added 95 of 1991 s. 31)
(3) Every director and every manager of an authorized institution which
contravenes this section commits an offence and is liable-
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years and, in the case of a continuing offence, to a
further fine of $ 10,000 for every day during which the offence continues;
or
(b) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months and, in the case of a continuing offence, to a further fine of
$ 5,000 for every day during which the offence continues.
(4) (Repealed 95 of 1991 s. 31)
(Amended 82 of 1992 s. 25)
88. Limitation on holding of interest in land by authorized institutions
(1) An authorized institution incorporated in Hong Kong shall not
purchase or hold any interest or interests in land situated in or outside
Hong Kong of a value or to an aggregate value, as the case may be, in
excess of 25 per cent of the capital base of the institution. (Amended 95
of 1991 s. 32)
(2) An authorized institution may, in addition to the value of any land
permitted to be purchased or held under subsection (1), purchase or hold
interests in land situated in or outside Hong Kong to any value, where the
occupation of such land is, in the opinion of the Monetary Authority,
necessary for conducting the business of the institution or providing
housing or amenities for the staff of the institution. (Amended 95 of 1991
s. 32; 82 of 1992 s. 25)
(3) For the purposes of subsection (2), but without limiting the
generality thereof, the Monetary Authority may in his discretion regard as
necessary for conducting the business of an authorized institution the
whole of any premises in which an office of the institution is situated.
(Amended 82 of 1992 s. 25)
(4) (Repealed 95 of 1991 s. 32)
(5) There shall not be taken into account in the assessment of the value
of interests in land for the purposes of this section the value of any
interest in land mortgaged to the authorized institution to secure a debt
due to the institution nor the value of any interest in land acquired
pursuant to entry into possession of land so mortgaged, provided that the
interest acquired is disposed of at the earliest suitable opportunity, and
in any event not later than 18 months after its acquisition or within such
further period as the Monetary Authority may, in writing, allow in any
particular case. (Amended 82 of 1992 s. 25)
(6) Every director and every manager of an authorized institution which
contravenes this section commits an offence and is liable-
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years and, in the case of a continuing offence, to a
further fine of $ 10,000 for every day during which the offence continues;
or
(b) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months and, in the case of a continuing offence, to a further fine of
$ 5,000 for every day during which the offence continues.
89. (Repealed 95 of 1991 s. 33)
90. Limitation on aggregate holdings under sections 83, 87 and
(1) Notwithstanding anything contained in sections 83, 87 and 88, in
respect of an authorized institution, the aggregate total of-
(a) the amount outstanding of all facilities specified in section 83 (3)
provided to or on behalf of persons or bodies specified in section 83 (4);
(b) the value of all holdings of share capital specified in section 87;
and
(c) the value of all holdings of interests in land specified in section
88 (1) and (2), shall not at any time exceed 80% of the capital base of
the institution. (Replaced 95 of 1991 s. 34)
(2) In assessing the aggregate total which is permissible under
subsection (1) there shall not be taken into account any matter which is
excluded from the operation of section 83, 87 or 88 by virtue of any of
the provisions thereof unless the Monetary Authority, by notice in writing
to the authorized institution concerned, otherwise specifies. (Amended 95
of 1991 s. 34; 82 of 1992 s. 25)
(3) Every director and every manager of an authorized institution which
contravenes this section commits an offence and is liable- (Amended 95 of
1991 s. 34)
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years and, in the case of a continuing offence, to a
further fine of $ 10,000 for every day during which the offence continues;
or
(b) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months and, in the case of a continuing offence, to a further fine of
$ 5,000 for every day during which the offence continues.
91. Proof of compliance with section 80, 81, 83, 85, 86, 87, 88 or 90
(1) Any authorized institution, if at any time called upon in writing by
the Monetary Authority so to do, shall satisfy him by the production of
such evidence or information as he may require, that the institution is
not in contravention of any of the provisions of section 80, 81, 83, 85,
86, 87, 88 or 90 applicable to that institution. (Replaced 95 of 1991 s.
35. Amended 82 of 1992 s. 25)
(2) Any authorized institution, if at any time called upon in writing by
the Monetary Authority so to do, shall satisfy him by the production of
such evidence or information as he may require, whether or not the
institution is engaging in any business practices specified in a notice
under section 82. (Amended 82 of 1992 s. 25)
(3) Every director and every manager of an authorized institution which
fails or refuses without reasonable excuse to comply with subsection (1)
or (2) commits an offence and is liable-
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years and, in the case of a continuing offence, to a
further fine of $ 10,000 for every day during which the offence continues;
or
(b) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months and, in the case of a continuing offence, to a further fine of
$ 5,000 for every day during which the offence continues.
PART XVI ADVERTISEMENTS, REPRESENTATIONS AND USE OF TITLE "BANK"
92. Offence to issue advertisements and documents relating to deposits
(1) Subject to subsection (5), no person shall-
(a) issue, or have in his possession for the purposes of issue, any
advertisement which to his knowledge is or contains an invitation to
members of the public-
(i) to make any deposit; or
(ii) to enter into, or offer to enter into, any agreement to make any
deposit;
(b) issue, or have in his possession for the purposes of issue, any
document which to his knowledge contains such an advertisement; or
(c) in any other manner issue or make an invitation to members of the
public to do any of the acts referred to in paragraph (a).
(2) Any person who contravenes subsection (1) commits an offence and is
liable on conviction upon indictment or on summary conviction to a fine of
$ 10,000.
(3) For the purposes of any proceedings under this section, an
advertisement or document in which a person named in the advertisement or
document holds himself out as being prepared to take in Hong Kong any
deposit shall, subject to subsection (4), be presumed, unless such named
person proves to the contrary, to have been issued by him.
(4) A person shall not be taken to contravene this section by reason
only that he issues, or has in his possession for the purposes of issue,
to purchasers copies of any newspaper, magazine, journal or other
periodical publication of general and regular circulation, which contain
an advertisement to which this section applies.
(4A) For the purposes of any proceedings under this section, a person
whose business it is to publish or arrange for the publication of
advertisements shall not be taken to contravene this section if he proves
that-
(a) he received the advertisement for publication in the ordinary course
of his business;
(b) the matters contained in the advertisement were not (wholly or in
part) devised or selected by him or by any person under his direction or
control; and
(c) he did not know and had no reason for believing that publication of
the advertisement would constitute an offence. (Added 67 of 1992 s. 8)
(5) This section shall not apply to-
(a) any advertisement or invitation, or any document containing any
advertisement or invitation, to make a deposit or to enter into, or offer
to enter into, any agreement to make a deposit with an authorized
institution; (Amended 64 of 1987 s. 24; 95 of 1991 s. 36)
(b) any advertisement or invitation, or any document containing any
advertisement or invitation, to which section 4 (1) of the Protection of
Investors Ordinance (Cap. 335) does not apply by virtue of section 4 (2)
(fb), (fc) or (g) of that Ordinance; or (Replaced 67 of 1992 s. 8)
(c) any prescribed advertisement which complies with the requirements
specified in the Fifth Schedule applicable to the prescribed
advertisement. (Added 95 of 1991 s. 36. Amended 67 of 1992 s. 8)
(6) Where any advertisement or invitation, or any document containing
any advertisement or invitation, relates to the taking of any deposit and
the taking of any such deposit is not, by virtue of section 3 (1) or (2),
a taking to which Part III applies then, to the extent that such
advertisement, invitation or document, as the case may be, relates to the
taking of any such deposit, this section shall not apply to such
advertisement, invitation or document, as the case may be. (Added 64 of
1987 s. 24)
(7) In this section and the Fifth Schedule, "prescribed advertisement"
means any advertisement or invitation, or any document containing any
advertisement or invitation, to make a deposit or to enter into, or offer
to enter into, any agreement to make a deposit outside Hong Kong. (Added
95 of 1991 s. 36)
93. Fraudulent inducement to make a deposit
(1) Any person who, by any fraudulent or reckless misrepresentation,
induces another person-
(a) to make a deposit with him or any other person; or
(b) to enter into or to offer to enter into any agreement to make a
deposit with him or any other person,
commits an offence and is liable on conviction upon indictment to a fine
of $ 1,000,000 and to imprisonment for 7 years.
(2) For the purposes of subsection (1), "fraudulent or reckless
misrepresentation" means-
(a) any statement-
(i) which, to the knowledge of the maker of the statement, was false,
misleading or deceptive; or
(ii) which was false, misleading or deceptive and was made recklessly;
(b) any promise-
(i) which the maker of the promise had no intention of fulfilling;
(ii) which, to the knowledge of the maker of the promise, was not
capable of being fulfilled; or
(iii) which was made recklessly;
(c) any forecast-
(i) which, to the knowledge of the maker of the forecast, was not
justified on the basis of facts known to him at the time when he made it;
or
(ii) which was not justified on the facts known to the maker of the
forecast at the time when he made it and was made recklessly; or
(d) any statement or forecast from which the maker intentionally or
recklessly omitted a material fact with the result that the statement or
forecast was thereby rendered false, misleading or deceptive.
94. Liability in tort for inducing persons to make a deposit in certain
cases
(1) Any person who, by any fraudulent, reckless or negligent
misrepresentation, induces another person to make a deposit with him or
any other person shall be liable to pay compensation to the person so
induced for any pecuniary loss that such person has sustained by reason of
his reliance on that misrepresentation.
(2) For the purposes of subsection (1), "fraudulent, reckless or
negligent misrepresentation" means-
(a) any statement-
(i) which, to the knowledge of the maker of the statement, was false,
misleading or deceptive;
(ii) which was false, misleading or deceptive and was made recklessly;
or
(iii) which was false, misleading or deceptive and was made without
reasonable care having been taken to ensure its accuracy;
(b) any promise-
(i) which the maker of the promise had no intention of fulfilling;
(ii) which, to the knowledge of the maker of the promise, was not
capable of being fulfilled; or
(iii) which was made recklessly or without reasonable care having been
taken to ensure that it could be fulfilled;
(c) any forecast-
(i) which, to the knowledge of the maker of the forecast, was not
justified on the basis of facts known to him at the time when he made it;
or
(ii) which was not justified on the facts known to the maker of the
forecast at the time when he made it and was made recklessly or without
reasonable care having been taken to ascertain the accuracy of those
facts; or
(d) any statement or forecast from which the maker intentionally,
recklessly or negligently omitted a material fact with the result that the
statement or forecast was thereby rendered false, misleading or deceptive.
(3) For the purposes of this section, where any statement, promise or
forecast to which this section relates was made by a company, every person
who was a director or controller of the company at the time when the
statement, promise or forecast was made shall, until the contrary is
proved, be deemed to have caused or permitted it to be made.
(4) This section does not affect any liability of any person at common
law.
(5) An action may be brought under this section notwithstanding that the
evidence on which the action is or will be based, if substantiated,
discloses the commission of an offence and no person has been charged with
or convicted of the offence.
(6) For the purposes of this section
"company" means, in addition to a company as defined in section 2, any
other body of persons, corporate or unincorporate.
95. False, etc. advertisements by authorized institution
(1) Where the Monetary Authority is of the opinion that any
advertisement issued in connexion with the business of an authorized
institution makes a statement or any representation that is false,
misleading or deceptive, he may, by notice in writing served on the
institution, require the institution to withdraw or, as the circumstances
require, remove, and to cease issuing such advertisements and an
authorized institution served with such a notice shall, accordingly,
comply with that notice. (Amended 82 of 1992 s. 25)
(2) Any authorized institution aggrieved by a notice served under
subsection (1) may appeal to the Financial Secretary against the
requirement contained therein, but the notice shall take effect
immediately notwithstanding that an appeal has been or may be made under
this subsection.
(3) Every director and every manager of an authorized institution which
fails or refuses to comply with any notice served under this section on it
commits an offence and is liable-
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years and, in the case of a continuing offence, to a
further fine of $ 10,000 for every day during which the offence continues;
or
(b) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months and, in the case of a continuing offence, to a further fine of
$ 5,000 for every day during which the offence continues.
96. Certain representations prohibited
(1) An authorized institution shall not in any communication, whether
written or oral, represent or imply, or permit to be represented or
implied, in any manner to any person that the institution has in any
respect been approved by the Government, the Financial Secretary or the
Monetary Authority. (Amended 82 of 1992 s. 25)
(2) Subsection (1) is not contravened by reason only that a statement is
made to the effect that an authorized institution is licensed or
registered.
(3) Every director and every manager of an authorized institution which
contravenes subsection (1) without reasonable excuse commits an offence
and is liable-
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years; or
(b) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months.
97. Restrictions on use of title "bank"
(1) Subject to this section, any person, other than a bank, or an
institution which is recognized as the central bank of the place in which
it is incorporated, who, without the written consent of the Monetary
Authority- (Amended 3 of 1990 s. 39; 95 of 1991 s. 37; 82 of 1992 s. 25)
(a) uses the word "bank" or any of its derivatives in English, or any
translation thereof in any language or uses the Chinese expression "ngan
hong", or uses the letters "b", "a", "n", "k" in that order, in the
description or title under which such person is carrying on business in
Hong Kong; or
(b) makes any representation in any bill head, letter paper, notice,
advertisement or in any other manner whatsoever that such person is a bank
or is carrying on banking business in Hong Kong, commits an offence and is
liable-
(i) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 12 months; or
(ii) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months.
(1A) Where a bank-
(a) is incorporated outside Hong Kong;
(b) is a bank in the place where it is incorporated; and
(c) uses, in the name under which it carries on business as a bank in
the place where it is incorporated, any of the terms to which subsection
(1) (a) applies, nothing in subsection (1) (a) shall prohibit a local
representative office of the bank from using the same name, or any
translation thereof in any language, in the name under which the
representative office is carrying on in Hong Kong the functions and
activities of a representative office provided such name-
(i) is used in immediate conjunction with the term "representative
office" in the same language as such name (which term, in the case of
Chinese, shall be the characters; and
(ii) is not more prominent than such term. (Added 95 of 1991 s. 37)
(1B) Nothing in subsection (1) (a) shall prohibit a company which is a
subsidiary, the holding company, or a subsidiary of the holding company,
of a specified bank from using a name which includes the name of such
bank, or any translation thereof in any language-
(a) in the description or title under which that first-mentioned company
is carrying on business in Hong Kong; and
(b) for the purpose of indicating the connection between that first
mentioned company and such bank, provided the name of such bank is not
more prominent than any other part of the name used by that first
mentioned company in which the name of such bank is included. (Added 95 of
1991 s.
37)
(2) Nothing in this section shall apply to any association of banks
formed for the protection or promotion of their mutual interests or to any
association of employees of banks formed for the protection or promotion
of the mutual interests of such employees.
(3) Nothing in subsection (1)
(a) shall prohibit a restricted licence bank using a specified term in
the description under which the restricted licence bank is carrying on in
Hong Kong the business of taking deposits. (Added 3 of 1990 s. 39)
(4) Where a restricted licence bank-
(a) is incorporated outside Hong Kong;
(b) is a bank in the place where it is incorporated; and
(c) uses, in the name under which it carries on business as a bank in
the place where it is incorporated, any of the terms to which subsection
(1) (a) applies, nothing in subsection (1) (a) shall prohibit the
restricted licence bank from using the same name, or any translation
thereof in any language, in the name under which the restricted licence
bank is carrying on in Hong Kong the business of taking deposits provided
such name-
(i) is used in immediate conjunction with the term "restricted licence
bank" in the same language as such name (which term, in the case of
Chinese, shall be the characters specified in paragraph (a) of the
definition of "specified term" in subsection (6); and
(ii) is not more prominent than such term.
(Added 3 of 1990 s. 39)
(5) Nothing in this Ordinance shall affect the determination of any
question whether a restricted licence bank or a deposit-taking company is
a bank for purposes other than those of this Ordinance, and accordingly
nothing in this section shall prohibit a restricted licence bank or a
deposit-taking company from using any of the terms to which subsection (1)
(a) applies with reference to itself in any case where-
(a) it wishes to comply with or take advantage of any relevant provision
of law or custom; and
(b) it is necessary for it to use any such term in order to be bale to
assert that it is complying with or entitled to take advantage of that
provision. (Added 3 of 1990 s. 39)
(6) In this section-
"relevant provision of law or custom" means any enactment, any
instrument made under an enactment, any international agreement, any rule
of law or any commercial usage or practice which confers any benefit on,
or otherwise has effect only in relation to, a person by virtue of such
person being a bank;
"specified bank" means-
(a) a bank which is licensed under section 16; or
(b) a bank which-
(i) is not licensed under section 16;
(ii) is incorporated outside Hong Kong;
(iii) uses, in the name under which it carries on business as a bank in
the place where it is incorporated, any of the terms to which subsection
(1) (a) applies; and
(iv) is, in the opinion of the Monetary Authority, adequately supervised
by a banking supervisory authority in its place of incorporation; (Added
95 of 1991 s. 37. Amended 82 of 1992 s. 25)
"specified term" means any of the following terms-
(a) "restricted licence bank" or;
(b) "merchant bank" or;
(c) "investment bank" or;
(d) "wholesale bank" or;
(e) a term specified by the Monetary Authority by notice in the Gazette
to be a specified term for the purposes of this definition, (Amended 82 of
1992 s. 25) and includes any derivatives of those terms in English or
Chinese. (Added 3 of 1990 s. 39)
97A. False statements as to authorized status
(1) No person shall describe himself, or otherwise hold himself out, so
as to indicate, or reasonably be construed to indicate, that he is-
(a) an authorized institution, or carrying on in Hong Kong the business
of taking deposits, unless he is an authorized institution;
(b) a bank, or carrying on in Hong Kong banking business, unless he is a
bank;
(c) a restricted licence bank unless he is a restricted licence bank;
(d) a deposit-taking company unless he is a deposit-taking company; or
(e) a local representative office unless he is a local representative
office.
(2) Any person who contravenes subsection (1) commits an offence and is
liable-
(a) on conviction upon indictment to a fine of $ 200,000 and to
imprisonment for 2 years; or
(b) on summary conviction to a fine of $ 50,000 and to imprisonment for
6 months. (Added 95 of 1991 s. 38)
PART XVII CAPITAL ADEQUACY RATION OF AUTHORIZED INSTITUTIONS
98. Capital adequacy ratio
(1) Subject to this Part and Part X, an authorized institution
incorporated in Hong Kong shall not, at any time, have a capital adequacy
ration of less than 8 per cent as calculated in accordance with the
provisions of the Third Schedule and subsection (2) except that any
requirement under section 79A (1) referred to in that Schedule shall not
apply in calculating such capital adequacy ratio. (Varied L. N. 413 of
1989) (Amended 95 of 1991 s. 39)
(2) Subject to subsection (2A), for the purposes of calculating the
capital adequacy ratio of an authorized institution which has any
subsidiary, the Monetary Authority may, by notice in writing to the
institution, require the capital adequacy ratio of the institution to be
calculated- (Amended 82 of 1992 s. 25)
(a) on a consolidated basis instead of on an unconsolidated basis; or
(b) on both a consolidated basis and an unconsolidated basis. (Replaced
95 of 1991 s. 39)
(2A) The Monetary Authority may, in a notice under subsection (2) to an
authorized institution, require the capital adequacy ratio of the
institution to be calculated on a consolidated basis only in respect of
such subsidiaries of the institution as are specified in the notice.
(Added 95 of 1991 s. 39. Amended 82 of 1992 s. 25)
(3) The Financial Secretary may, by notice in the Gazette, vary the
percentage specified in subsection (1).
99. Failure to keep to capital adequacy ratio
(1) Where an authorized institution contravenes section 98 (1), it shall
forthwith notify the Monetary Authority of that contravention and provide
him with such particulars of that contravention as he may require.
(Amended 82 of 1992 s. 25)
(2) Where the Monetary Authority is notified under subsection (1) of a
contravention of section 98 (1), he shall forthwith notify the Financial
Secretary of that contravention and provide him with such particulars of
that contravention as he may require. (Amended 82 of 1992 s. 25)
(3) Every director and every manager of an authorized institution which
contravenes subsection (1) commits an offence and is liable on conviction
upon indictment to a fine of $ 500,000 and to imprisonment for 5 years
and, in the case of a continuing offence, to a further fine of $ 10,000
for every day during which the offence continues.
100. Remedial action
(1) Where an authorized institution contravenes section 98 (1), the
institution and the Monetary Authority shall enter into discussions for
the purposes of determining what remedial action is required to be taken
by the institution for it to comply with that section, but the Monetary
Authority shall not be bound by any such discussions.
(2) The Monetary Authority may, after holding such discussions as he
thinks fit under subsection (1), by notice in writing served on the
authorized institution, require the institution to take such remedial
action as is specified in the notice for the purpose of having the
institution comply with section 98 (1).
(3) Any authorized institution aggrieved by any requirement contained in
a notice under subsection (2) served on it by the Monetary Authority may
appeal to the Governor in Council against the requirement, but that
requirement shall take effect immediately, notwithstanding that an appeal
has been or may be made under this subsection. (Amended 3 of 1990 s. 41)
(4) (Repealed 3 of 1990 s. 41)
(5) Every director and every manager of an authorized institution which
contravenes any requirement contained in a notice under subsection (2)
commits an offence and is liable on conviction upon indictment to a fine
of $ 500,000 and to imprisonment for 5 years and, in the case of a
continuing offence, to a further fine of $ 10,000 for every day during
which the offence continues.
(Amended 82 of 1992 s. 25)
101. Monetary Authority may increase capital adequacy ratio for
particular authorized institutions
(1) The Monetary Authority may, after consultation with an authorized
institution, by notice in writing served on it vary the capital adequacy
ratio specified in section 98 (1) in relation to that institution by
increasing the ratio to- (Amended 82 of 1992 s. 25)
(a) in the case of an authorized institution which is a bank, not more
than 12 per cent; and
(b) in the case of an authorized institution which is a deposit-taking
company or a restricted licence bank, not more than 16 per cent, and,
where the ratio is so varied, the other provisions of this Part shall, in
relation to that institution, apply as if the ratio specified in section
98 (1) were the ratio as so varied. (Varied L.N. 413 of 1989) (Amended 64
of 1987 s. 25; 3 of 1990 s. 42)
(2) The Financial Secretary may, by notice in the Gazette, vary any
percentage specified in subsection (1).
(3) An authorized institution aggrieved by a variation of the capital
adequacy ratio contained in a notice under subsection (1) served on it by
the Monetary Authority may appeal, by notice in writing served on the
Monetary Authority and the Financial Secretary stating the grounds of the
appeal, to the Financial Secretary against the variation, but that
variation shall take effect immediately, notwithstanding that an appeal
has been or may be made under this subsection. (Amended 82 of 1992 s. 25)
(4) The Financial Secretary shall determine an appeal under subsection
(3) by confirming, varying or reversing the variation of capital adequacy
ratio the subject of the appeal.
PART XVIII LIQUIDITY RATIO OF AUTHORIZED INSTITUTIONS AND MATTERS AFFECTING LIQUIDITY RATIO
102. Liquidity ratio
(1) Subject to this Part and Part X, every authorized institution shall
maintain a liquidity ratio of not less than 25 per cent in each calendar
month as calculated in accordance with the provisions of the Fourth
Schedule and this Part.
(2) The liquidity ratio of an authorized institution shall be calculated
for each calendar month on the basis of the sum of its liquefiable assets
and the sum of its qualifying liabilities, within the meaning of the
Fourth Schedule, for each working day of the calendar month concerned
except that the Monetary Authority may, as he thinks fit, by notice in
writing served on an authorized institution, permit the institution to
calculate its liquidity ratio by reference to such days during the
calendar month concerned as the Monetary Authority may specify in the
notice:
(Amended 82 of 1992 s. 25)
Provided that if any such specified day is a public holiday the
immediately preceding working day shall be taken for the purposes of such
calculation.
(3) In relation to an authorized institution that operates in Hong Kong
and also elsewhere, this Part shall apply only to its principal place of
business in Hong Kong and its local branches and shall do so as if that
principal place of business and those branches were collectively a
separate authorized institution.
(4) The Financial Secretary may, by notice in the Gazette, vary the
percentage specified in subsection (1).
103. Failure to keep to liquidity ratio
(1) Where an authorized institution contravenes section 102 (1), it
shall forthwith notify the Monetary Authority of that contravention and
provide him with such particulars of that contravention as he may require.
(Amended 82 of 1992 s. 25)
(2) Where the Monetary Authority is notified under subsection (1) of a
contravention of section 102 (1), he shall forthwith notify the Financial
Secretary of that contravention and provide him with such particulars of
that contravention as he may require. (Amended 82 of 1992 s. 25)
(3) Every director and every manager of an authorized institution which
contravenes subsection (1) commits an offence and is liable on conviction
upon indictment to a fine of $ 500,000 and to imprisonment for 5 years
and, in the case of a continuing offence, to a further fine of $ 10,000
for every day during which the offence continues.
104. Remedial action
(1) Where an authorized institution contravenes section 102 (1), the
institution and the Monetary Authority shall enter into discussions for
the purposes of determining what remedial action is required to be taken
by the institution for it to comply with that section, but the Monetary
Authority shall not be bound by any such discussions.
(2) The Monetary Authority may, after holding such discussions as he
thinks fit under subsection (1), by notice in writing served on the
authorized institution, require the institution to take such remedial
action as is specified in the notice for the purpose of having the
institution comply with section 102 (1).
(3) Any authorized institution aggrieved by any requirement contained in
a notice under subsection (2) served on it by the Monetary Authority may
appeal to the Governor in Council against the requirement, but that
requirement shall take effect immediately, notwithstanding that an appeal
has been or may be made under this subsection. (Amended 3 of 1990 s. 43)
(4) (Repealed 3 of 1990 s. 43)
(5) Every director and every manager of an authorized institution which
contravenes any requirement contained in a notice under subsection (2)
commits an offence and is liable on conviction upon indictment to a fine
of $ 500,000 and to imprisonment for 5 years and, in the case of a
continuing offence, to a further fine of $ 10,000 for every day during
which the offence continues.
(Amended 82 of 1992 s. 25)
105. Monetary Authority may vary liquidity ratio for particular
authorized institutions
(1) The Monetary Authority may, by notice in writing served on an
authorized institution, vary the liquidity ratio specified in section 102
(1) in relation to that institution by increasing or decreasing the ratio
and, where the ratio is so varied, sections 102, 103 and 104 shall, in
relation to that institution, apply as if the ratio specified in section
102 (1) were the ratio as so varied.
(2) Where the Monetary Authority varies under subsection (1) the
liquidity ratio of any authorized institution, he shall forthwith provide
the Financial Secretary with particulars of the variation.
(3) An authorized institution aggrieved by a variation of the liquidity
ratio contained in a notice under subsection (1) served on it by the
Monetary Authority may appeal, by notice in writing served on the Monetary
Authority and the Financial Secretary stating the grounds of the appeal,
to the Financial Secretary against the variation, but that variation shall
take effect immediately, notwithstanding that an appeal has been or may be
made under this subsection.
(4) The Financial Secretary shall determine an appeal under subsection
(3) by confirming, varying or reversing the variation of liquidity ratio
the subject of the appeal.
(Amended 82 of 1992 s. 25)
106. Authorized institutions not to create certain charges and to notify
Monetary Authority of certain civil proceedings
(1) Subject to subsection (2), an authorized institution incorporated in
Hong Kong shall not, except with the approval of the Monetary Authority,
which approval shall be subject to such conditions as he may think proper
to attach thereto, by whatever means cause the sum total of all amounts
secured by way of charge over its assets (excluding contra items) to
exceed 5 per cent of the sum total of the value of those assets. (Amended
82 of 1992 s. 25)
(2) Where, immediately upon the commencement of this Ordinance, the sum
total of all amounts secured by way of charge over the assets (excluding
contra items) of an authorized institution incorporated in Hong Kong
exceeds 5 per cent of the sum total of the value of those assets, the
institution shall be deemed to have an approval under subsection (1)
until-
(a) the expiration of 3 months after that commencement, or such further
period as the Monetary Authority may allow in any particular case; or
(Amended 82 of 1992 s. 25)
(b) it receives an approval under subsection (1),
whichever first occurs.
(3) Where any civil proceedings have been instituted against any
authorized institution incorporated in Hong Kong, irrespective of whether
the proceedings have been instituted before, on or after the commencement
of this Ordinance, the institution shall, if those proceedings, materially
affect, or could materially affect, the financial position of the
institution, forthwith notify the Monetary Authority of those proceedings
and provide the Monetary Authority with such particulars of those
proceedings as he may require. (Amended 82 of 1992 s. 25)
(4) Every director and every manager of an authorized institution which
contravenes subsection (1) or (3) commits an offence and is liable-
(a) on conviction upon indictment to a fine of $200,000 and to
imprisonment for 2 years and, in the case of a continuing offence, to a
further fine of $10,000 for every day during which the offence continues;
and
(b) on summary conviction to a fine of $50,000 and to imprisonment for 6
months and, in the case of a continuing offence, to a further fine of
$5,000 for every day during which the offence continues.
(5) For the purposes of subsections (1) and (2)-
"assets" includes assets outside Hong Kong;
"charge" includes lien, encumbrance, equitable interest and third party
right;
"value" shall have the same meaning assigned to it in section 79
(1).
PART XIX 107-116. (Repealed 43 of 1990 s. 8)
PART XX INVESTIGATIONS OF AUTHORIZED INSTITUTIONS
117. Investigations on behalf of the Financial Secretary
(1) If it appears to the Monetary Authority that it is in the interests
of depositors of an authorized institution or a former authorized
institution or in the public interest that an inquiry should be made into
the affairs of that institution he may make a report to that effect to the
Financial Secretary. (Amended 82 of 1992 s. 25)
(2) The Financial Secretary, on receipt of a report under subsection
(1), may appoint a competent person to investigate and report-
(a) to him; and
(b) in the case of an authorized institution which is or has been a
deposit-taking company, to the Monetary Authority, (Amended 3 of 1990 s.
44; 82 of 1992 s. 25) on the state and conduct of the business of the
authorized institution concerned, or any particular aspect of that
business specified by him.
(3) The Financial Secretary may, from time to time after making an
appointment under subsection (2), and before the person so appointed
reports to him, require that person to inquire into any further aspect of
the authorized institution concerned.
(4) The person appointed under subsection (2) shall be paid such
remuneration and allowances and be appointed on such terms as the
Financial Secretary shall from time to time determine.
(5) On receipt of the report of the person appointed under subsection
(2) the Financial Secretary may, without limiting the generality of the
exercise by him of any other powers which he may exercise under this
Ordinance-
(a) if he is of the opinion that it is in the public interest to do so,
cause the whole or any part of a report under this section to be published
in such manner as he thinks fit:
Provided that nothing in a report published under this paragraph shall
enable any particular customer of an authorized institution to be
identified or reveal details of the affairs of any such customer without
the consent of that customer;
(b) require the person appointed under subsection (2) to report further
on any matters arising from the report;
(c) refer the report to the Governor in Council with the recommendation
that the Governor in Council should exercise one or more of his powers
under, in the case of an authorized institution which is a bank, sections
29 and 53 or, in the case of an authorized institution which is a deposit-
taking company or a restricted licence bank, section 53;
(d) if it appears that an offence may have been committed by any person,
refer the report to the Attorney General;
(e) in the case of an authorized institution which is a deposit-taking
company, refer the report to the Monetary Authority with the
recommendation that the Monetary Authority should exercise one or more of
his powers under section 31 and Part VI; (Amended 82 of 1992 s. 25)
(f) apply to the High Court for a winding-up order under section 122
(5). (Amended 3 of 1990 s. 44)
(6) The Financial Secretary shall not exercise his powers under
subsection (2) in the case of a former authorized institution which ceased
to be an authorized institution 12 months or more before the date of the
report under subsection (1).
(7) Any person who-
(a) with intent to defeat the purposes of this section or to delay or
obstruct the carrying out of an investigation under this section-
(i) conceals, destroys, mutilates or alters a document relating to a
matter which is the subject of an investigation by a person appointed
under subsection (2); or
(ii) sends, or causes to be sent, or conspires with another person to
send, out of Hong Kong any such document; or
(b) knowingly furnishes to a person appointed under subsection (2) any
information which is false or misleading in a material particular,
commits an offence and is liable on conviction upon indictment or on
summary conviction to a fine of $20,000 and to imprisonment for 2 years.
(8) For the avoidance of doubt, it is hereby declared that the reference
in subsection (6) to "former authorized institution" shall include any
person which was a deposit-taking company within the meaning of this
Ordinance as in force at any time before the [1] commencement of the
Banking (Amendment) Ordinance 1990 (3 of 1990). (Added 3 of 1990 s. 44)
118. Powers of the inspector and offences in connection with the
investigation
(1) Subject to this section, the inspector may determine the manner in
which an inquiry under section 117 is to proceed.
(2) If the inspector thinks it necessary for the purposes of his
investigation, he may also investigate the business of any company which
is or has at any relevant time been-
(a) a holding company or subsidiary of the body whose business is under
investigation;
(b) a subsidiary of a holding company of that body; or
(c) a holding company of a subsidiary of that body.
(3) It shall be the duty of every director, manager, employee, or agent
of a company whose business is under investigation (whether by virtue of
section 117 (2) or subsection (2) and any person who has in his possession
books, papers or information relevant to the investigation-
(a) to produce to the inspector all books and papers relating to the
company concerned which are in his custody or power;
(b) to attend before the inspector when required to do so; and
(c) to answer truthfully and to the best of his ability any questions
which may be put to him by the inspector and which are relevant to the
investigation: Provided that an inspector shall not require the disclosure
by a solicitor or counsel of any privileged communication, whether oral or
written, made to or by him in that capacity.
(4) Anything said by any person in answer to a question put by the
inspector under subsection (3) (c) shall be inadmissible in any criminal
proceedings other than criminal proceedings brought under this section.
(5) Any director, manager, employee or agent of a company and any other
person who-
(a) without reasonable excuse fails to produce any books or papers which
it is his duty to produce under subsection (3); or
(b) without reasonable excuse fails to attend before the inspector when
required to do so under this section; or
(c) fails to answer to the best of his ability any question which is put
to him by an inspector with respect to a business which is under
investigation under section 117 or to the business of any body corporate
which is being investigated by virtue of subsection (2),
commits an offence and is liable on conviction upon indictment or on
summary conviction to a fine of $20,000 and to imprisonment for 6 months.
(6) In this section-
(a) "inspector" means a person appointed under section 117 (2);
(b) any reference to a director, manager, employee or agent of a company
includes a reference to a person who has been but no longer is a director,
manager, employee or agent of that company;
(c) "agent" in relation to a company whose business is under
investigation includes its bankers and solicitors and any persons, whether
officers of the body or not, who are employed as its auditors.
PART XXI MISCELLANEOUS
119. Governor in Council to decide whether or not banking business or
business of taking deposits is being conducted
(1) In the event of any dispute as to whether a person is carrying on a
banking business or a business of taking deposits, the matter, except in
the case of a prosecution for any offence against this Ordinance, shall be
submitted to the Governor in Council for his determination; and the
decision of the Governor in Council shall be final and conclusive for all
purposes of this Ordinance.
(2) A submission under subsection (1) may be made by the Financial
Secretary or by any bank, deposit-taking company or restricted licence
bank or person which or who is interested in the determination of the
matter. (Amended 3 of 1990 s. 45)
120. Official secrecy
(1) Except as may be necessary for the exercise of any function under
this Ordinance or for carrying into effect the provisions of this
Ordinance, every person to whom this subsection applies- (Amended 64 of
1987 s. 26)
(a) shall preserve and aid in preserving secrecy with regard to all
matters relating to the affairs of any person that may come to his
knowledge in the exercise of any function under this Ordinance;
(b) shall not communicate any such matter to any person other than the
person to whom such matter relates; and
(c) shall not suffer or permit any person to have access to any records
in the possession, custody or control of any person to whom this
subsection applies;
(2) Subsection (1) shall apply to any person who is or has been-
(a) a public officer;
(b) a person authorized by the Monetary Authority;
(c) a person appointed under section 52 (1) (B), or by order of the
Governor in Council under section 53 (1) (ii), to advise an authorized
institution in the proper conduct of its business;
(d) a person who has assumed control of the business of an authorized
institution pursuant to a direction under section 52 (1) (C) or an order
of the Governor in Council under section 53 (1) (ii);
(e) a person appointed under section 117 (2); and
(f) a person employed by or assisting a person to whom this subsection
applies by virtue of paragraph (b), (c), (d), or (e), who exercises or has
exercised any function under this Ordinance.
(3) Where under section 52 (1) (C) or under section 53 (1) (ii) the
Monetary Authority assumes control of and carries on the business of an
authorized institution or any other person is directed so to do,
subsection (1) shall not apply if the Monetary Authority or such other
person is required to comply with a notice to furnish returns and
information under section 51 of the Inland Revenue Ordinance (Cap. 112).
(4) No person who exercises any function in the course of an examination
or investigation under section 47, 50, 55, or 117 or who receives reports,
returns or information submitted under section 47, 50, 55, 56, 59, 63 or
64 shall be required to produce in any court any book, account or other
document whatsoever or to divulge or communicate to any court any matter
or thing coming under his notice in the exercise of his functions under
this Ordinance, except as may be necessary in the course of a prosecution
for any offence or of a winding-up by the High Court under section 122.
(Amended 67 of 1992 s. 9)
(5) Subsection (1) shall not apply-
(a) to the disclosure of information in the form of a summary of similar
information provided by a number of authorized institutions if the summary
is so framed as to prevent particulars relating to the business of any
particular authorized relating to the business of any particular
authorized institution being ascertained from it;
(b) to the disclosure of information with a view to the institution of,
or otherwise for the purposes of, any criminal proceedings, whether under
this Ordinance or otherwise;
(c) in connection with any other legal proceedings arising out of this
Ordinance;
(d) to the disclosure of information to the police or the Independent
Commission Against Corruption, at the request of the Attorney General,
relevant to the proper investigation of any criminal complaint;
(e) to the disclosure of information by the Monetary Authority with a
view to the institution of, or otherwise for the purposes of, any
disciplinary proceedings relating to the exercise of his professional
duties by an auditor or former auditor of an authorized institution or
former authorized institution, whether or not the auditor or former
auditor, as the case may be, was appointed under section 50, 59 or 63;
(Replaced 43 of 1990 s. 9. Amended 67 of 1992 s. 9; 82 of 1992 s. 20)
(f) to the disclosure of information by the Monetary Authority to the
Governor, the Financial Secretary, the Secretary for Financial Services,
an inspector appointed by the Financial Secretary to investigate the
affairs of a company, a person holding an authorized statutory office or
any public officer authorized by the Financial Secretary for the purposes
of this paragraph where, in the opinion of the Monetary Authority-
(Amended L.N. 96 of 1993)
(i) it is desirable or expedient that information should be so disclosed
in the interests of depositors or potential depositors or the public
interest; or
(ii) such disclosure will enable or assist the recipient of the
information to exercise his functions and it is not contrary to the
interests of depositors or potential depositors or the public interest
that the information should be so disclosed; (Replaced 95 of 1991 s. 40)
(g) to the disclosure of information by the Monetary Authority to an
auditor of an authorized institution or former authorized institution, or
to a former auditor, for the purpose of enabling or assisting the Monetary
Authority to discharge his functions under this Ordinance; (Replaced 43 of
1990 s. 9. Amended 95 of 1991 s. 40)
(h) subject to subsection (5D), to the disclosure of information by the
Monetary Authority with the consent of-
(i) the person from whom the information was obtained or received; and
(ii) where the information does not relate to such person, the person to
whom it relates; or (Added 95 of 1991 s. 40)
(i) to the disclosure of information which has been made available to
the public by virtue of being disclosed in any circumstances in which, or
for any purpose for which, disclosure is not precluded by this section or
section 121. (Added 95 of 1991 s. 40)
(5A) For the purposes of subsection (5) (f), "authorized statutory
office" means-
(a) the Insurance Authority under the Insurance Companies Ordinance
(Cap. 41); or (Amended 10 of 1989 s. 65)
(b) the securities and Futures Commission. (Replaced 10 of 1989 s. 65)
(c)- (d) (Repealed 10 of 1989 s. 65)
(Added 68 of 1988 s. 2)
(5B) The Legislative Council may, by resolution, amend subsection (5A).
(Added 68 of 1988 s. 2)
(5C) The Monetary Authority may attach a condition to any disclosure of
information made pursuant to subsection (5) (b), (c), (d), (e), or (f),
and shall attach a condition to any disclosure of information made
pursuant to subsection (5) (g), that neither-
(a) the person to whom the information has been disclosed; nor
(b) any person obtaining or receiving the information (whether directly
or indirectly) from the person referred to in paragraph (a), shall
disclose that information to any other person without the consent of the
Monetary Authority. (Added 95 of 1991 s. 40)
(5D) Subsection (2) (h) shall not operate to require the Monetary
Authority to disclose in or in relation to any civil proceedings any
information which he may disclose, or has disclosed, pursuant to that
subsection. (Added 95 of 1991 s. 40)
(6) Any person who-
(a) contravenes subsection (1);
(b) aids, abets, counsels or procures any person to contravene
subsection (1); or
(c) knowing that the condition referred to in subsection (5C) has been
attached to a disclosure of information made pursuant to subsection (5),
contravenes, or aids, abets, counsels or procures any person to
contravene, that condition, (Added 95 of 1991 s. 40) commits an offence
and is liable-
(i) on conviction upon indictment to a fine of $500,000 and to
imprisonment for 2 years; or
(ii) on summary conviction to a fine of $50,000 and to imprisonment for
6 months. (Amended 3 of 1990 s. 46; 82 of 1992 s. 20)
121. Disclosure of information relating to authorized institutions
(1) Subject to subsection (3), and notwithstanding section 120, the
Monetary Authority may disclose information to an authority in a place
outside Hong Kong where-
(a) that authority exercises functions in that place corresponding to
the functions of-
(i) the Monetary Authority; or
(ii) an authorized statutory office within the meaning of section 120
(5A); and
(b) in the opinion of the Monetary Authority-
(i) that authority is subject to adequate secrecy provisions in that
place; and
(ii) it is desirable or expedient that information should be so
disclosed in the interests of depositors or potential depositors or the
public interest; or
(iii) such disclosure will enable or assist the recipient of the
information to exercise his functions and it is not contrary to the
interests of depositors or potential depositors or the public interest
that the information should be so disclosed. (Replaced 95 of 1991 s. 41)
(2) subject to subsection (3) and notwithstanding section 120, the
Monetary Authority may, if he considers that it is in the interests of
customers of the representative office, provide to the appropriate
recognized banking supervisory authority of a place outside Hong Kong
which is, in his opinion, subject to adequate secrecy provisions in that
place information on matters relating to the affairs of a local
representative office which is maintained by a bank incorporated in that
place.
(2A) (Replaced 95 of 1991 s. 41)
(3) Under no circumstances shall the Monetary Authority provide any
information under this section relating to the affairs of any individual
customer of an authorized institution or a local representative office.
(Amended 95 of 1991 s. 41) (Amended 82 of 1992 s. 25)
122. Winding-up of authorized institutions
(1) The provisions of the Companies Ordinance (Cap. 32) with regard to a
creditors' voluntary winding-up shall not apply to authorized
institutions.
(2) On a petition by the Financial Secretary, acting in accordance with
a direction of the Governor in Council under section 53 (1) (iii), the
High Court may-
(a) on any ground specified in section 177 of the Companies Ordinance
(Cap. 32); or
(b) if it is satisfied that it is in the public interest that the
authorized institution or former authorized institution should be wound
up, order the winding-up of an authorized institution or former authorized
institution in accordance with the provisions of the Companies Ordinance
(Cap. 32) relating to the winding-up of companies.
(3) Where before the presentation of a petition for the winding-up of an
authorized institution by the court, whether or not the petition is
presented by the Financial Secretary, the Monetary Authority has assumed
control of the business of the institution under section 52 (1) (C) or
pursuant to an order of the Governor in Council under section 53 (1) (ii)
or some other person has assumed control of the business of the
institution pursuant to a direction of the Monetary Authority under
section 52 (1) (C) or an order of the Governor in Council under section 53
(1) (ii) and such control has continued at all times until the
presentation of the petition, and a winding-up order is made thereon,
then, notwithstanding the provisions of section 184 (2) of the Companies
Ordinance (Cap. 32), the winding-up of the institution by the court shall,
for the purposes of sections 170, 179, 182, 183, 266, 267, 269 and 274,
and paragraphs (d), (e), (h), (i), (j), (k), (l) and (0) of section 271
(1), of the Companies Ordinance (Cap. 32), be deemed to have commenced at
the time the Monetary Authority or such other person assumed control of
the business of the institution. (Amended 95 of 1991 s. 42; 82 of 1992 s.
25)
(4) 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 of the Monetary Authority under section 52 (1) (C) or an
order of the Governor in Council under section 53 (1) (ii), nothing in
section 182 of the Companies Ordinance (Cap. 32) shall invalidate any
disposition of the property of the institution made by it under the
direction of the Monetary Authority or such person acting bona fide in the
course of the carrying on of the business of the institution. (Amended 82
of 1992 s. 25)
(5) Where the Financial Secretary is entitled to petition the High Court
by virtue of section 117 (5) (f), the High Court may wind up a deposit-
taking company or restricted licence bank or former deposit-taking company
or restricted licence bank in accordance with the provisions of the
Companies Ordinance (Cap. 32) relating to the winding-up of companies if-
(a) the deposit-taking company or restricted licence bank is unable to
pay sums due and payable to its depositors or is able to pay such sums
only by defaulting on its obligations; or
(b) the value of the deposit-taking company's or restricted licence
bank's assets is less than the amount of its liabilities. (Replaced 3 of
1990 s. 47)
(6) Nothing in this section shall authorize the winding-up of a former
deposit-taking company or restricted licence bank which does not continue
to have any liability in respect of any deposit for which it had a
liability at the time when it was registered or licensed. (Amended 3 of
1990 s. 47)
123. Offences by directors, managers, trustees, employees and agents
Any director, manager, trustee, employee or agent of any authorized
institution who, with intent to deceive-
(a) wilfully makes, or causes to be made, a false entry in any book of
record or in any report, slip, document or statement of the business,
affairs, transactions, condition, assets or accounts of the institution;
(b) wilfully omits to make an entry in any book of record or in any
report, slip, document or statement of the business, affairs,
transactions, condition, assets or accounts of the institution, or
wilfully causes any such entry to be omitted; or
(c) wilfully alters, abstracts, conceals or destroys an entry in any
book of record, or in any report, slip, document or statement of the
business, affairs, transactions, condition, assets or accounts of the
institution, or wilfully causes any such entry to be altered, abstracted
concealed or destroyed, commits an offence and is liable-
(i) on conviction upon indictment to a fine of $500,000 and to
imprisonment for 5 years; or
(ii) on summary conviction to a fine of $50,000 and to imprisonment for
2 years.
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