Butterworths Hong Kong Banking Law Handbook, 3rd Edition

PART I: PRELIMINARY

1 Short title

2 Interpretation

3 Application

PART II: APPOINTMENTS, FUNCTIONS OF MONETARY AUTHORITY, REPORTS BY MONETARY AUTHORITY AND POWER OF CHIEF EXECUTIVE TO GIVE DIRECTIONS

4 Banking Advisory Committee

5 Deposit-taking Companies Advisory Committee

6 (Repealed 82 of 1992 s 14)

7 Functions of Monetary Authority

8 (Repealed 82 of 1992 s 16)

9 Reports by Monetary Authority

10 Power of Chief Executive to give directions

PART III: BANKING BUSINESS AND BUSINESS OF TAKING DEPOSITS TO BE CARRIED ON BY AUTHORIZED INSTITUTIONS 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

14A Only authorized institutions may issue, etc multi-purpose cards

PART IV: AUTHORIZATION

15 Application for authorization, etc

16 Grant or refusal of authorization, etc

17 Application for authorization in the case of proposed company

18 Variation of authorization

19 Fees payable by authorized institutions

20 Register of authorized institutions, etc

21 Publication of names entered in or removed from register and suspensions

PART V: REVOCATION OF AUTHORIZATION

22 Revocation of authorization

23 Procedure on and effect of revocation of authorization

PART VI: SUSPENSION OF AUTHORIZATION

24 Temporary suspensions

25 Suspensions

26 Opportunity of being heard

27 Effect of suspension

PART VII: TRANSFER OF AUTHORIZATION

28 Transfer of authorization

29 Application for transfer

30 Certificate of transfer, etc

31 Liabilities and privileges of transferer and transferee

32 (Repealed 49 of 1995 s 6)

33 (Repealed 49 of 1995 s 6)

34 (Repealed 49 of 1995 s 6)

35 (Repealed 49 of 1995 s 6)

36 (Repealed 49 of 1995 s 6)

37 (Repealed 49 of 1995 s 6)

38 (Repealed 49 of 1995 s 6)

39 (Repealed 49 of 1995 s 6)

40 (Repealed 49 of 1995 s 6)

41 (Repealed 49 of 1995 s 6)

42 (Repealed 49 of 1995 s 6)

43 (Repealed 49 of 1995 s 6)

PART VIII: LOCAL BRANCHES, LOCAL OFFICES, LOCAL REPRESENTATIVE OFFICES AND FEES

44 Control of establishment, etc of local branches

45 Fees in respect of local branches

45A Notification of commencement of business at local offices

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, FEES AND OVERSEAS BANKING CORPORATIONS

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

51A Control of establishment, etc of overseas banking corporations

PART X: POWERS OF CONTROL OVER AUTHORIZED INSTITUTIONS

52 Powers of Monetary Authority

53 Powers of Chief Executive in Council

53A Notification of direction under section 52(1)(B) or (C), etc

53B Effect of direction under section 52(1)(C)

53C Powers of Manager

53D Court of First Instance may approve certain resolutions

53E Court of First Instance may make certain orders

53F Duration of direction under section 52(1)(B) or (C)

53G Advisors, Managers and assistants

53H Obstruction, etc. of Manager

54 (Repealed 49 of 1995 s 16)

55 Examination and investigation of authorized institutions, etc

56 Production of authorized institution?s, etc, books, etc

57 (Repealed 49 of 1995 s 16)

58 (Repealed 49 of 1995 s 16)

58A Disciplinary action in respect of relevant individuals

PART XI: AUDITS AND MEETINGS

59 Audit

59A Notification in respect of auditors

59B Notification by authorized institution of end of financial year, etc.

60 Publication of audited balance sheet, etc

60A Disclosure to the general public of information relating to financial affairs

61 Communication by auditor with Monetary Authority

62 (Repealed 43 of 1990 s 6)

PART XII: DISCLOSURE OF INFORMATION BY AUTHORIZED INSTITUTIONS

63 Returns and information to be submitted to the Monetary Authority

63A Auditor to report to Monetary Authority any matter which adversely affects financial position of authorized institution to material extent

63B Auditors of registered institutions to submit report to Monetary Authority in certain cases

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, and to certain existing 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 consent

71C Executive officers of registered institutions require Monetary Authority?s consent

71D Appointment of executive officers

71E Grant of provisional consent in relation to persons seeking Monetary Authority?s consent under section 71C(1) to be executive officers

71F Transitional provisions in relation to sections 71C and 71D in the case of certain registered institutions

72 (Repealed 95 of 1991 s 20)

72A Monetary Authority may require specified persons to submit information

72B Notification of appointment of manager, etc

73 Certain persons prohibited from acting as employees of authorized institutions except with consent of Monetary Authority

74 Appointment of chief executive

PART XIV: SHARE CAPITAL, RESERVE AND DIVIDEND OF AUTHORIZATION INSTITUTIONS

75 (Repealed)

76 (Repealed 95 of 1991 s 23)

77 (Repealed 95 of 1991 s 23)

78 (Repealed 95 of 1991 s 23)

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 Limitations on advances to directors, etc of bank

84 (Repealed 95 of 1991 s 29)

85 Limitation on advances to employees

86 Powers of Monetary Authority where moneys placed with foreign bank

87 Limitation on shareholding by authorized institutions

87A Acquisition by authorized institutions incorporated in Hong Kong of share capital in companies

88 Limitation on holding of interest in land by authorized institutions

89 (Repealed 95 of 1991 s 33)

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: ADVERTISEMENTS, REPRESENTATIONS AND USE OF TITLE ?BANK?

92 Offence to issue advertisements, etc. 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 name ?bank?

97A False statements as to authorized status

PART XVII: CAPITAL ADEQUACY RATIO OF AUTHORIZED INSTITUTIONS

98 Capital adequacy ratio

98A Calculation of 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 XVIIA: CAPITAL ADEQUACY REVIEW TRIBUNAL

101A Establishment of Capital Adequacy Review Tribunal

101B Application to Review Tribunal

101C Determination of review by Review Tribunal

101D Registration of determination made by Review Tribunal

101E Powers of Review Tribunal

101F Sittings of Review Tribunal to be held in private

101G Use of incriminating evidence given under compulsion

101H Appeal to Court of Appeal

101I Power of Chief Justice to make rules

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: UNINCORPORATED BANKS

107 (Repealed 43 of 1990 s 8)

108 (Repealed 43 of 1990 s 8)

109 (Repealed 43 of 1990 s 8)

110 (Repealed 43 of 1990 s 8)

111 (Repealed 43 of 1990 s 8)

112 (Repealed 43 of 1990 s 8)

113 (Repealed 43 of 1990 s 8)

114 (Repealed 43 of 1990 s 8)

115 (Repealed 43 of 1990 s 8)

116 (Repealed 43 of 1990 s 8)

PART XX: INVESTIGATIONS OF AUTHORIZED INSTITUTIONS

117 Investigations on behalf of Financial Secretary

118 Powers of the inspector and offences in connection with the investigation

PART XXA: MONEY BROKERS

118A Only approved money brokers may act as money brokers

118B Application for approval

118C Determination of application for approval

118D Revocation of approval

118E Procedure on and effect of revocation of approval

118F Fees payable by approved money brokers

PART XXI: MISCELLANEOUS

119 Chief Executive 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, chief executives, 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 95 of 1991 s 44)

129 Validity of contract in contravention of this Ordinance or any Ordinance repealed by this Ordinance

130 (Repealed 49 of 1995 s 41)

131 Recovery of fees, expenses, etc

131A Cost related fees to be paid into Exchange Fund

132 Use of language

132A Appeals

132B Level of fines for offences under this Ordinance

133 Power of Monetary Authority to specify forms

134 Service of notices

134A Monetary Authority to consult, etc, before attaching conditions to authorization

134B Monetary Authority to consult, etc, before attaching conditions to certificate of approval

135 Power to amend Schedules

136 Consent of Secretary for Justice

137 (Amendments Incorporated)

137A Exclusion of provisions of Gambling Ordinance (Cap 148)

137B Prescribed instruments

PART XXII: TRANSITIONAL, SAVINGS AND REPEAL

138 Interpretation

139 Appointed members of former committees to continue in office

140 (Repealed 82 of 1992 s 23)

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

152 Transitional provisions in relation to Banking (Amendment) Ordinance 1995

153 Transitional provisions in relation to Banking (Amendment) Ordinance 1997

Sch 1 Specified period and specified sums

Sch 2 Fees

Sch 3 (Repealed 19 of 2005 s 7)

Sch 4 Liquidity Ratio

Sch 5 Requirements applicable to prescribed advertisements

Sch 6 Specified instruments

Sch 7 Minimum criteria for authorization

Sch 8 Grounds for revocation of authorization

Sch 9 Powers of Manager of authorized institution

Sch 10 (Repealed 42 of 1999 s 18)

Sch 11 Minimum criteria for approval as money broker

Sch 12 Grounds for revocation of approval of money broker

Sch 13 Level of fines for offences

Sch 14 Affairs or business of authorized institutions specified for purposes of definition of ?manager?

Sch 15 Provisions relating to Capital Adequacy Review Tribunal

Stephen SK Chan

LLM, PCLL, LLB 
Lecturer, School of Accounting and Finance
The Hong Kong Polytechnic University

Mr Stephen Chan is a lecturer in the School of Accounting and Finance, the Hong Kong Polytechnic University. He obtained his Master of Laws from the University of Hong Kong and his Master of Education from the Chinese University of Hong Kong. 

His main research interests are in the areas of Banking Law, Company Law, Insolvency Law and Securities Regulations. He is the contributor of the Banking and Finance volume (Volume 2), the Bills of Exchange and Other Negotiable Instruments volume (Volume 3) of the Halsbury?s Laws of Hong Kong. He is the author of the Hong Kong Bankruptcy Law Handbook (2007). He has also published in various journals, including the Hong Kong Law Journal.