FINANCIAL AND MONETARY AFFAIRS
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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.
In addition to the criteria which apply to other authorised institutions, registration of deposit-taking companies will be granted only to companies that are 50 per cent or more owned by a bank. 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 of maturity of at least three months. At the end of December 1995, there were 132 deposit-taking companies, with total deposit liabilities to cus- tomers of $18 billion at the end of December 1995.
In November 1995, the HKMA published a comprehensive Guide to Applicants, which outlines the manner in which it shall apply the authorisation criteria.
Dealers in securities, investment advisers, commodity dealers and commodity- trading advisers and their representatives have to register with the Securities and Futures Commission. To obtain registration, they must comply with the require- ments (including the 'fit and proper' test) stipulated in the Securities Ordinance, the Commodities Trading Ordinance, the Leveraged Foreign Exchange Trading Ordinance, and the Securities and Futures Commission Ordinance. At the end of 1995, there were 17 231 registered persons. Of the 494 registered corporate securities dealers, 251 were from overseas. Of the 151 commodities dealers, 76 were from
overseas.
Only members of the Stock Exchange of Hong Kong Limited may trade on the stock exchange. At the end of the year, the stock exchange had 559 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 1995, the futures exchange had 130 members.
Under the Insurance Companies Ordinance, insurance companies are authorised by the Insurance Authority to transact business in Hong Kong. At the end of 1995, there were 223 authorised companies. Of these, 123 were companies from 28 countries.
Regulation of the Financial Sector
The government has consistently worked towards providing a favourable environ- ment in the financial sector, with adequate regulation to ensure, as far as possible, sound business standards and confidence in the institutional framework, but without unnecessary impediments of a bureaucratic or fiscal nature.
The authority for the prudential supervision of banks, restricted-licence banks and deposit-taking companies is vested in the HKMA. Its authority is derived from the Banking Ordinance, the provisions of which relate to the supervision of authorised institutions. The main objectives of the ordinance are to provide a measure of protection to depositors and to promote the general stability and effective operation. of the banking system.
The HKMA has broadened its approach to supervision, which previously relied mainly upon on-site examinations. These are still an integral part of the supervisory process, but are supplemented by off-site reviews and prudential meetings with authorised institutions.
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