- 2 -
{
A.
It is our intention that this exemption should
not apply to loans that are both significant and
concessionary.
Bearing in mind that a registered deposit-
taking company is required under the Banking Ordinance to
have a minimum paid up capital of $10 million and a
licensed deposit-taking company of $75 million, it has
been suggested that for such companies, loans below
$10 million may be significant.
per cent
I therefore propose that
all concessionary loans which exceed the lower of
$10 million or 10% of the paid up capital and reserves of
the company should be reported in the annual accounts.
Banks will not be affected by this new formula because 100
of their minimum paid up capital and reserves will always
exceed $10 million.
percent
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6.
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Other amendments required to clause 3 are to
correct a minor drafting error and to clarify first that
the disclosure provisions of the Ordinance cover companies
incorporated by specific ordinances, and secondly that the
maximum aggregate in new section 161B(4B) means the
maximum balance on all relevant loans on an aggregate
basis calculated daily. It is the maximum balance at any
one time which is of interest, not the total amount lent
in the course of the year.