FINANCIAL AND MONETARY AFFAIRS
Only licensed banks may operate current or savings accounts. They may also accept deposits of any size and any maturity from the public. The interest rate rules of the Hong Kong Association of Banks (of which all licensed banks are required, under their licensing conditions, to be members) result in the setting of maximum rates payable on bank deposits of original maturities up to 15 months less a day, with the exception of deposits of $500,000 or above with a term to maturity of less than three months, for which banks may compete freely.
Restricted banking licences are granted at the discretion of the Financial Secretary. Companies are required to have a minimum issued and paid-up capital of $100 million, and to meet certain criteria regarding ownership, general standing, and quality of management. If incorporated overseas, the applicants must also be subject to adequate home super- vision. Restricted licence banks may take deposits of any maturity from the public, but in amounts of not less than $500,000. There are no restrictions on the interest rates they may offer. At the end of 1992, there were 56 restricted licence banks and their total deposit liabilities to customers was $35 billion.
Restricted licence banks are able to use the word 'bank' in describing their business in promotional literature and advertisements but this must be qualified by adjectives such as 'restricted licence', 'merchant', or 'investment'. To avoid confusion with licensed banks, descriptions such as 'retail' or 'commercial' are not allowed. Overseas banks seeking authorisation as restricted licence banks may operate in branch or subsidiary form. If in branch form, they may use their registered name even if it includes the word 'bank' or a derivative, but in this case it must be qualified prominently by the words 'restricted licence bank' in immediate conjunction.
The authority to register deposit-taking companies rests with the Commissioner of Banking. Since April 1981, the Commissioner has, at the direction of the Governor, restricted new registrations to companies which, as well as meeting certain basic criteria, are more than 50 per cent owned by banks in Hong Kong or elsewhere. Deposit-taking companies are required to have a minimum paid-up capital of $25 million. They are restricted to taking deposits of not less than $100,000 with a term to maturity of at least three months. At the end of 1992, there were 147 deposit-taking companies, and their total deposit liability to customers was $19 billion.
Apart from deposit-taking, conventional lending and foreign exchange dealing, banks and deposit-taking companies in Hong Kong are increasingly diversifying into other financial services, including securities business, fund management and the provision of investment advice.
Dealers in securities, investment advisers, commodity dealers and commodity-trading advisers and their representatives are required to be registered with the Securities and Futures Commission. To obtain registration, they must comply with the requirements (including the 'fit and proper' test) stipulated in the Securities Ordinance, the Commodities Trading Ordinance and the Securities and Futures Commission Ordinance. At the end of 1992, there were 9 242 registered persons. Of the 311 registered corporate securities dealers, 150 were from overseas. Of the 105 commodities dealers, 41 were from overseas.
Only members of the Stock Exchange of Hong Kong Limited are permitted to trade on the Stock Exchange. At the end of 1992, the Stock Exchange had 620 corporate and individual members. Only shareholders who have applied for and been granted membership of the Hong Kong Futures Exchange Limited can trade on the Futures Exchange. At the end of 1992, the Futures Exchange had 90 members.
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