C182
BANKING BILL
BANKING BILL
C183
Remedial action.
Commissioner
may vary liquidity ratio for particular
authorized institutions.
Authorized institutions not to create certain
charges and
to notify
Commissioner of
certain civil proceedings.
(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.
108. (1) Where an authorized institution contravenes section 106(1), the 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 is not 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 106(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.
109. (1) The Commissioner may, by notice in writing served on an authorized institution, vary the liquidity ratio specified in section 106(1) in relation to that institution by increasing or decreasing the ratio and, where the ratio is so varied, sections 106, 107 and 108 shall, in relation to that institution, apply as if the ratio specified in section 106(1) were the ratio as so varied.
(2) Where the Commissioner 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 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 liquidity ratio the subject of the appeal.
110. (1) Subject to subsection (2), an authorized institution shall not, except with the approval of the Commissioner, 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 charges over its assets (excluding contra items) in Hong Kong to exceed 5 per cent of the sum total of the value of those assets.
(2) Where, immediately upon the commencement of this Ordinance, the sum total of all charges over an authorized institution's assets (excluding contra items) 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 Commissioner may allow in any particular case; or
(b) it receives an approval under subsection (1),
whichever first occurs.
(3) Subject to subsection (4), where any civil proceedings have been instituted against any authorized institution to recover claimed indebtedness, irrespective of whether the proceedings, have been instituted before, on or after the commencement of this Ordinance, and the subject of the proceedings, or part of the proceedings, are or may be any assets of the institution, the institution shall, if those proceedings adversely affect, or could adversely affect, the financial position of the institution, forthwith notify the Commissioner of those proceedings and provide the Commis- sioner with such particulars of those proceedings as he may require.
(4) An authorized institution incorporated outside Hong Kong is not required to notify the Commissioner of civil proceedings referred to in subsection (3) if those proceedings are instituted outside Hong Kong.
(5) 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.
(6) For the purposes of subsections (1) and (2)-—---
"charges" includes liens, encumbrances, equitable interests and third party rights; "value" shall have the same meaning assigned to it in section 79(2).
PART XIX
UNINCORPORATED BANKS
111. (1) The Governor in Council may, for the purposes of and in accordance Grant of banking with section 119(2), grant a banking licence to carry on banking business in Hong licence to Kong to any unincorporated person or body of persons.
unincorporated banks.
(2) A banking licence may be granted under subsection (1), notwithstanding that the unincorporated person or body of persons does not comply and does not propose to comply with the provisions of section 18, 75, 77, Part XVII or XVIII.
112. (1) An application for a banking licence under section 111 shall be made to Application for the Governor in Council through the Commissioner.
banking licence under section III.
(2) An application for a banking licence under section 111 shall be accompanied
by such documents and information as the Commissioner or the Governor in Council may require.
113. (1) An unincorporated bank shall pay the annual banking licence fee Banking licence
fee for specified in the Second Schedule.
unincorporated
bank.
(2) The fees payable under this section shall be paid upon the grant of a banking licence and thereafter upon every anniversary of the date of the grant of such banking Second Schedule.
licence.
114. (1) Every unincorporated bank shall appoint annually an auditor.
(2) The duties of the auditor so appointed shall be
(a) to carry out for the year in respect of which he is appointed an audit of the
accounts of the bank;
Auditor.