A200
Ord. No. 27/86
BANKING
BANKING
Ord. No. 27/86
A201
Failure to keep to capital adequacy ratio.
Remedial action.
Commissioner
may increase
capital adequacy
ratio for particular authorized
institutions.
99. (1) Where an authorized institution contravenes section 98(1), it shall forthwith notify the Commissioner of that contravention and provide him with such particulars of that contravention as he may require.
(2) Where the Commissioner is notified under subsection (1) of a contravention of section 98(1), he shall forthwith notify the Financial Secretary of that contraven- tion and provide him with such particulars of that contravention as he may require.
(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. (1) Where an authorized institution contravenes section 98(1), the institu- tion and the Commissioner shall enter into discussions for the purposes of determin- ing what remedial action is required to be taken by the institution for it to comply with that section, but the Commissioner shall not be bound by any such discussions.
(2) The Commissioner 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 Commissioner may appeal, by notice in writing served on the Commissioner and the Financial Secretary stating the grounds of the appeal, to the Financial Secretary against the requirement, but that require- ment 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 requirement the subject of the appeal.
(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.
101. (1) The Commissioner may, after consultation with an authorized institu- tion, 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-
(a) in the case of an authorized institution which is a bank, not more than 8 per
cent; and
(b) in the case of an authorized institution which is a deposit-taking company,
not more than 10 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) where the ratio as so varied.
(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 Commissioner may appeal, by notice in writing served on the Commissioner 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 capital adequacy ratio the subject of the appeal.
PART XVIII
LIQUIDITY RATIO OF AUTHORIZED INSTITUTIONS AND MATTERS AFFECTING LIQUIDITY RATIO
102. (1) Subject to this Part and Part X, every authorized institution shall Liquidity ratio. 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.
Fourth Schedule.
(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 Fourth Schedule. day of the calendar month concerned except that the Commissioner 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 Commissioner may specify in the notice:
Provided that if any such specified day is a public holiday the immediately pre- ceding 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. (1) Where an authorized institution contravenes section 102(1), it shall Failure to keep to forthwith notify the Commissioner of that contravention and provide him with such liquidity ratio. particulars of that contravention as he may require.
(2) Where the Commissioner is notified under subsection (1) of a contravention of section 102(1), he shall forthwith notify the Financial Secretary of that contraven- tion and provide him with such particulars of that contravention as he may require.
(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. (1) Where an authorized institution contravenes section 102(1), the Remedial action. institution and the Commissioner 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 Commissioner shall not be bound by any such discussions.
(2) The Commissioner 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 Commissioner may appeal, by notice in writing served on the Commissioner and the Financial Secretary stating the grounds of the appeal, to the Financial Secretary against the requirement, but that require- ment 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 requirement the subject of the appeal.
(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.
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