(CHAPTER 66)
(CHAPTER 66)
Whole document:
To make provision for the establishment and management of an exchange fund
and as to the employment of its assets in Hong Kong.
(Amended 20 of 1948 s. 4; 17 of 1979 s. 2)
[6 December 1935]
1. Short title
This Ordinance may be cited as the Exchange Fund Ordinance.
(Amended 20 of 1948 s. 4)
2. Interpretation
In this Ordinance, unless the context otherwise requires-
"bank notes lawfully issued" means notes issued in the Colony by any of
the note-issuing banks in accordance with the provisions of The Hongkong
and Shanghai Banking Corporation Limited Ordinance (Cap. 70) and the
charter of incorporation of Standard Chartered Bank or any supplemental
charter of that bank, or issued in accordance with the above-mentioned
provisions as modified by this Ordinance, or the Bank Notes Issue
Ordinance (Cap. 65); (Amended 20 of 1948 s. 4; 54 of 1956 s. 3; 7 of 1978
s. 3; 76 of 1984 s. 2; L. N. 333 of 1989)
"foreign exchange" means all currencies other than Hong Kong currency and
includes sterling and other Commonwealth currencies; (Amended 20 of 1948
s. 4) "Monetary Authority" means the Monetary Authority appointed under
section 5A; (Added 82 of 1992 s. 2)
"note-issuing bank" means Standard Chartered Bank, and The Hongkong and
Shanghai Banking Corporation Limited. (Amended 54 of 1956 s. 3; 14 of 1958
s. 3; 7 of 1978 s. 3; 76 of 1984 s. 2; L. N. 333 of 1989)
3. Establishment control and management of Exchange Fund
(1) There shall be established a fund to be called "the Exchange Fund"
which shall be under the control of the Financial Secretary and shall be
used primarily for such purposes as the Financial Secretary thinks fit
affecting, either directly or indirectly the exchange value of the
currency of Hong Kong and for other purposes incidental thereto. The
control of the Financial Secretary shall be exercised in consultation with
an Exchange Fund Advisory Committee of which the Financial Secretary shall
be chairman and of which the other members shall be appointed by the
Governor. (Amended 12 of 1946 s. 2; 26 of 1983 s. 2; 82 of 1992 s. 3)
(1A) In addition to using the Fund for its primary purpose, the Financial
Secretary may, with a view to maintaining Hong Kong as an international
financial centre, use the Fund as he thinks fit to maintain the stability
and the integrity of the monetary and financial systems of Hong Kong.
(Added 82 of 1992 s. 3)
(1B) The Financial Secretary, in using the Fund for the purpose specified
in subsection (1A), shall have regard to the primary purpose of the Fund.
(Added 82 of 1992 s. 3)
(2) The Fund, or any part of it, may be held in Hong Kong currency or in
foreign exchange or in gold or silver or may be invested by the Financial
Secretary in securities approved by the Secretary of State; and the
Financial Secretary may for the account of the Fund buy or sell such
currency or such exchange or gold or silver or securities accordingly.
(Replaced 25 of 1971 s. 2. Amended 8 of 1975 s. 2; 26 of 1983 s. 2)
(3) Subject to subsection (4), the Financial Secretary may borrow for the
account of the Fund either in Hong Kong or elsewhere on the security of
any asset held by the Fund or on the general revenue. (Added 25 of 1971
s.2. Amended 26 of 1983 s. 2)
(3A) There shall be credited to the Fund the value of any coinage issued
under or by virtue of The Hong Kong (Coinage) Orders 1936 to 1978 (App.
III, p. AA1) and the value of any proceeds of sale of such coinage after
it has ceased to be legal tender. (Added 26 of 1983 s. 2)
(4) The aggregate amount of borrowing under subsection (3), other than on
certificates of indebtedness issued under section 4, outstanding at any
one time shall, subject to subsection (5), not exceed fifty thousand
million dollars, or, if held in foreign exchange, the equivalent at the
current rate of exchange. (Added 25 of 1971 s. 2. Amended L. N. 150 of
1971; L. N. 125 of 1972; L. N. 56 of 1980; L. N. 173 of 1980; L. N. 363
of 1980; L. N. 388 of 1981; L. N. 64 of 1987)
(5) The Legislative Council may from time to time, by resolution proposed
with the approval of the Secretary of State, determine some other amount
to be the amount which the aggregate amount of such borrowings outstanding
at any one time shall not exceed. (Added 25 of 1971 s. 2. Amended 16 of
1984 s. 2)
4. Certificates of indebtedness
(1) The Financial Secretary is authorized to issue to any note-issuing
bank, to be held as cover for bank notes lawfully issued in the Colony,
certificates of indebtedness in the form in the Schedule and to require
such bank to pay to him for the account of the Fund the face value of such
certificates, or the equivalent in such foreign exchange and at such rate
of exchange as may be determined by the Financial Secretary, to be held by
the Fund principally for the redemption of such notes. (Replaced 4 of 1951
Schedule. Amended 26 of 1983 s. 3. 16 of 1984 s. 3)
(2) The Financial Secretary may employ the funds paid to him in accordance
with subsection (1), for the purchase of foreign exchange or gold or
otherwise in accordance with the provisions of section 3 (2) or for the
redemption of certificates of indebtedness at their face value or the
equivalent in such foreign exchange and at such rate of exchange as may be
determined by the Financial Secretary. (Replaced 4 of 1951 Schedule.
Amended 16 of 1984 s. 3)
(3) The Financial Secretary may apply the proceeds of the sale of foreign
exchange or gold for Hong Kong currency in accordance with section 3 (2)
to the redemption of certificates issued under subsection (1). (Amended 12
of 1946 s. 2)
4A. (Repealed 64 of 1987 s. 31)
5. Preservation of limits on note issue
Nothing in this Ordinance shall empower any note-issuing bank to issue
notes in excess of any maximum limit laid down in any Ordinance or charter
governing the issue of such notes, and in issuing certificates under this
section the Financial Secretary shall take into account such maximum
limits.
(Replaced 4 of 1951 Schedule. Amended 7 of 1978 s. 3)
5A. Appointment of Monetary Authority
(1) The Financial Secretary shall appoint a person to be the Monetary
Authority on such terms and conditions as he thinks fit.
(2) The Monetary Authority shall-
(a) assist the Financial Secretary in the performance of his functions
under this Ordinance;
(b) perform such functions as the Financial Secretary may direct; and
(c) perform functions imposed on or assigned to the Monetary Authority by
any other Ordinance.
(3) The Financial Secretary may appoint, on such terms and conditions as
he thinks fit, persons to assist the Monetary Authority in the performance
of the functions of the Monetary Authority specified in subsection (2).
(4) Notwithstanding subsection (2) (b) and (c), the Monetary Authority and
persons appointed to assist him under subsection (3) shall be regarded,
for all purposes, as employed in connection with the purposes of the Fund.
(5) In this section "functions" includes powers and duties.
(Added 82 of 1992 s. 4)
5B. Delegation to Monetary Authority
(1) The Financial Secretary may delegate to the Monetary Authority the
powers and duties conferred or imposed on the Financial Secretary under
this Ordinance.
(2) A delegation or a subdelegation under this section-
(a) shall not preclude the Financial Secretary from exercising the power
or performing the duty;
(b) may be conditional, qualified or limited as the Financial Secretary
thinks fit;
(c) may be to a person performing the functions of the Monetary Authority
for the time being; and
(d) may be amended by the Financial Secretary.
(3) The Financial Secretary may include in a delegation under this section
power to subdelegate the powers and duties delegated on such terms and to
such person or to any person of a class or description, as may be
specified by him.
(Added 82 of 1992 s. 4)
6. Charges on Fund
There shall be charged to the Fund-
(a) the emoluments payable to, and other staff costs relating to, the
persons employed in connection with the purposes of the Fund, including
the investment thereof, and also including any appropriate share of such
emoluments or staff costs in respect of the services of public officers so
employed as part of their duties:
Provided that the number of appointments and the emoluments of such staff
have been approved by the Financial Secretary; (Replaced 26 of 1983 s. 4)
(aa) any expenses incurred in the issue and maintenance in circulation of
any coinage issued under or by virtue of The Hong Kong (Coinage) Orders
1936 to 1978 (App. III, p. AA 1); and (Added 26 of 1983 s. 4)
(b) any incidental expenditure which the Governor may approve as necessary
for the due performance of the duties laid upon the Financial Secretary
and the Advisory Committee in connection with the operation of the fund.
(Replaced 44 of 1936 S. 3. Amended 12 of 1946 s. 2; 20 of 1948 s. 4)
7. Audit of Fund
The accounts of all transactions of the Fund shall be audited at such
times and in such manner as the Governor may from time to time direct.
(Amended 44 of 1936 s. 3; 26 of 1983 s. 5)
8. Transfer from the Fund
The Financial Secretary may from time to time, after consultation with the
Exchange Fund Advisory Committee and with the approval of the Secretary of
State, transfer from the Fund to the general revenue of the Colony or to
such other funds of the Colony as may be authorized by the Secretary of
State any sum, or any part of any sum, in excess of the amount required to
maintain the assets of the Fund at 105 per cent of the total of-
(a) the aggregate of the borrowings made under section 3 and for the time
being outstanding; and
(b) the aggregate of the face value of the certificates of indebtedness
issued under section 4 and for the time being outstanding,
and may for such purpose realize any of the assets of the Fund.
(Added 6 of 1964 s. 2. Amended 31 of 1968 s. 3)
[S. 4 (1)]
SCHEDULE HONGKONG EXCHANGE FUND ORDINANCE (Chapter 66)
Certificate of Indebtedness for $
This certificate issued under the Exchange Fund Ordinance (Chapter 66)
represents indebtedness of the Hong Kong Government without
interest to
for the amount of dollars
and is redeemable at any time at the option of the Financial Secretary at
its face value or the equivalent in such foreign exchange and at such rate
of exchange as may be determined by the Financial Secretary.
This certificate may be held up to the above-mentioned amount as cover for
bank notes lawfully issued in Hong Kong.
HONG KONG.
19
Monetary Authority.
(Replaced 26 of 1983 s. 6. Amended 16 of 1984 s. 4; 82 of 1992 s. 5)
ervation of limits on note issue
Nothing in this Ordinance shall empower any note-issuing bank to issue
notes in excess of any maximum limit laid down in any Ordinance or charter
governing the issue of such notes, and in issuing certificates under this
section the Financial Secretary shall take into account such maximum
limits.
(Replaced 4 of 1951 Schedule. Amended 7 of 1978 s. 3)
5A. Appointment of Monetary Authority
(1) The Financial Secretary shall appoint a person to be the Monetary
Authority on such terms and conditions as he thinks fit.
(2) The Monetary Authority shall-
(a) assist the Financial Secretary in the performance of his functions
under this Ordinance;
(b) perform such functions as the Financial Secretary may direct; and
(c) perform functions imposed on or assigned to the Monetary Authority by
any other Ordinance.
(3) The Financial Secretary may appoint, on such terms and conditions as
he thinks fit, persons to assist the Monetary Authority in the performance
of the functions of the Monetary Authority specified in subsection (2).
(4) Notwithstanding subsection (2) (b) and (c), the Monetary Authority and
persons appointed to assist him under subsection (3) shall be regarded,
for all purposes, as employed in connection with the purposes of the Fund.
(5) In this section "functions" includes powers and duties.
(Added 82 of 1992 s. 4)
5B. Delegation to Monetary Authority
(1) The Financial Secretary may delegate to the Monetary Authority the
powers and duties conferred or imposed on the Financial Secretary under
this Ordinance.
(2) A delegation or a subdelegation under this section-
(a) shall not preclude the Financial Secretary from exercising the power
or performing the duty;
(b) may be conditional, qualified or limited as the Financial Secretary
thinks fit;
(c) may be to a person performing the functions of the Monetary Authority
for the time being; and
(d) may be amended by the Financial Secretary.
(3) The Financial Secretary may include in a delegation under this section
power to subdelegate the powers and duties delegated on such terms and to
such person or to any person of a class or description, as may be
specified by him.
(Added 82 of 1992 s. 4)
6. Charges on Fund
There shall be charged to the Fund-
(a) the emoluments payable to, and other staff costs relating to, the
persons employed in connection with the purposes of the Fund, including
the investment thereof, and also including any appropriate share of such
emoluments or staff costs in respect of the services of public officers so
employed as part of their duties:
Provided that the number of appointments and the emoluments of such staff
have been approved by the Financial Secretary; (Replaced 26 of 1983 s. 4)
(aa) any expenses incurred in the issue and maintenance in circulation of
any coinage issued under or by virtue of The Hong Kong (Coinage) Orders
1936 to 1978 (App. III, p. AA 1); and (Added 26 of 1983 s. 4)
(b) any incidental expenditure which the Governor may approve as necessary
for the due performance of the duties laid upon the Financial Secretary
and the Advisory Committee in connection with the operation of the fund.
(Replaced 44 of 1936 S. 3. Amended 12 of 1946 s. 2; 20 of 1948 s. 4)
7. Audit of Fund
The accounts of all transactions of the Fund shall be audited at such
times and in such manner as the Governor may from time to time direct.
(Amended 44 of 1936 s. 3; 26 of 1983 s. 5)
8. Transfer from the Fund
The Financial Secretary may from time to time, after consultation with the
Exchange Fund Advisory Committee and with the approval of the Secretary of
State, transfer from the Fund to the general revenue of the Colony or to
such other funds of the Colony as may be authorized by the Secretary of
State any sum, or any part of any sum, in excess of the amount required to
maintain the assets of the Fund at 105 per cent of the total of-
(a) the aggregate of the borrowings made under section 3 and for the time
being outstanding; and
(b) the aggregate of the face value of the certificates of indebtedness
issued under section 4 and for the time being outstanding,
and may for such purpose realize any of the assets of the Fund.
(Added 6 of 1964 s. 2. Amended 31 of 1968 s. 3)
[S. 4 (1)]
SCHEDULE HONGKONG EXCHANGE FUND ORDINANCE (Chapter 66)
Certificate of Indebtedness for $
This certificate issued under the Exchange Fund Ordinance (Chapter 66)
represents indebtedness of the Hong Kong Government without
interest to
for the amount of dollars
and is redeemable at any time at the option of the Financial Secretary at
its face value or the equivalent in such foreign exchange and at such rate
of exchange as may be determined by the Financial Secretary.
This certificate may be held up to the above-mentioned amount as cover for
bank notes lawfully issued in Hong Kong.
HONG KONG.
19
Monetary Authority.
(Replaced 26 of 1983 s. 6. Amended 16 of 1984 s. 4; 82 of 1992 s. 5)
|