FINANCIAL AND MONETARY AFFAIRS
under the privacy legislation. Recent market developments, especially the surge in personal bankruptcies, have highlighted the importance of data sharing for credit assessment by banks. The HKMA presented the banking industry's proposal on sharing positive consumer credit data to the Legislative Council in April 2002. Having assessed the proposal, the Privacy Commissioner (PC) issued a consultation paper on proposals to revise the privacy legislation to permit greater sharing of consumer credit data by credit providers through a credit reference agency. The PC is reviewing public opinions received, and will issue a consultation report in January 2003.
As regards electronic banking (e-banking), the HKMA continued to implement its e-banking and technology risk management supervisory framework. In particular, the HKMA carried out a series of specialist on-site examinations to evaluate the e-banking and general technology risk management measures adopted by selected strategically important banks and other selected AIs. In May, the HKMA issued a statutory guideline related to advertising material for deposits issued over the Internet. In response to the HKMA's proposal, the Hong Kong Association of Banks (HKAB) formed an e-banking working group in November to promote industry-level cooperation such as consumer education on Internet security. The group comprises representatives of banks, the Hong Kong Police Force and the HKMA.
In view of the incidents in the United States on September 11, 2001, the HKMA issued a circular in January offering some preliminary lessons learned from them. During the year, the HKMA reviewed the business continuity plans of selected major banks and other selected AIs during its on-site examinations. After further research and consultation with the banking industry, the HKMA issued a guideline in December setting out more comprehensive and detailed guidance on business continuity planning.
One of the functions of the HKMA is to promote and encourage high standards of conduct and sound and prudent business practices amongst AIs. This is important to maintain public confidence and trust in the banking system. In 2001, after a comprehensive review, the HKMA revised the Code of Banking Practice which sets. out the minimum standards to be followed by AIs in their dealings with personal customers. The review covered areas such as credit cards, account and loan services, use of debt collection agencies, e-banking and stored value cards. The revised code was promulgated in November 2001. The industry-based Code of Banking Practice Committee was subsequently formed in 2002 to provide guidance on the interpretation of the code and to keep it under constant review.
On developing financial infrastructure, the existing one-way link between Euroclear and CMU was extended to a two-way link in November. This fully automated real- time link enables Asian investors to hold and settle Euroclear-eligible securities directly via their CMU accounts, thus significantly improving settlement efficiency. The existing one-way link between Clearstream and CMU will also be extended to two-way in January 2003.
Securities and Futures Sector
Main Features
The securities market and the futures market in Hong Kong are operated by the SEHK and the HKFE, respectively. Both the SEHK and the HKFE are wholly- owned subsidiaries of the HKEx. At year-end, there were 487 corporate and
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