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Objects and Reasons.
1. The object of this Bill is to consolidate and amend the constitution of the Hongkong and Shanghai Bank, which is at present to be found in two different Ordinances, namely, 2 of 1866 and 2 of 1924, and in the Deed of Settlement of 1867 and the amendments thereto.
2. Concurrently with the Bill there have been prepared a new set of regulations of the Bank to replace the pro- visions of the Deed of Settlement and amendments, which regulations appear in the Schedule to the Bill.
3. The Bill contains an interpretation clause (clause 2). Hitherto the interpretation clause has been in the Deed of Settlement, but it is considered more regular that it should appear in the Ordinance. The present interpretation clause
s fuller than that in the Deed of Settlement.
4. The Bank is being now incorporated for an unlimited period (see clause 3). Under previous legislation the Bank has been incorporated for limited periods only, and the current terin of incorporation would, apart from the provisions of this Ordinance, expire in August, 1929. It is obviously desirable that the incorporation of the Bank should now be made permanent.
5. Clause substitutes new regulations for the provi sions in the Deed of Settlement, and provides for amend- ment and proof of such regulations. It also enacts that the Ordinance and the regulations for the time being shall bind not merely the Bank and the shareholders but also third parties. The reason for binding third parties is that they are affected by certain provisions of the regulations, namely, 34 (1), 36, 42, 44, 45, 51, 52 and 53.
6. Clause 5 (1), in conjunction with regulation No. 3, shows a marked advance on section 4 (1) of Ordinance No. 2 of 1866, which authorises the carrying on of the business of banking only. Regulation No. 3, which has been drafted after most careful consideration of the Bank's present and prospective requirements, enables the Bank to carry on all such kinds of business as experience has shown can be suitably and profitably conducted in con- junction with the main and principal business of banking.
7. Clause 5 (1) also contains a definition of the word "establishment", and continues the pre sent practice that new establishments of the Bank shall only be opened with the consent of the Commissioners for the time being of His Majesty's Treasury. Clause 5 (2) gives the Bank power to close any of its establishments.
8. Clause 6 corresponds with the first part of section 21 of Ordinance No. 2 of 1866. As regards the latter part of that section, see regulation No. 3 (12).
9. Clause 7 reproduces in simplified language the com- bined effect of sections 5 and 22 of Ordinance No. 2 of 1866, as amended by section 3 of Ordinance No. 10 of 1922.
10. Clauses 8 and 9 make certain provisions as to altera- tion and reorganisation of capital, which might possibly in the future be useful, applicable to the Bank. These provisions are based on sections 41 and 45 of the English Companies Act, 1908, except that, for the sake of sim- plicity,
(1) the power of sub-division conferred by clause 8 (b) is made exerciseable by ordinary resolution instead of by special resolution, and
(2) the power of reorganisation in clause 9 is made exerciseable subject to the prior approval of the Governor instead of subject to the prior approval of the court.