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WEDNESDAY, FEBRUARY 27, 1985
HE SAID THE OPPORTUNITY WOULD ALSO BE TAKEN TO INTRODUCE SOME RELATIVELY MINOR TECHNICAL CHANGES TO THE PRINCIPAL ORDINANCE.
ON THE 1984 AMENDMENT ORDINANCE RELATING TO INTEREST, SIR JOHN SAID A NUMBER OF FURTHER REPRESENTATIONS HAD BEEN RECEIVED OVER THE PAST FEW MONTHS AND THAT THEY HAD BEEN STUDIED BY THE ADMINISTRATION, THE LEGCO AD HOC GROUP, AND UMELCO.
+SOME OF THE REPRESENTATIONS HAVE MERIT AND MAY WELL REQUIRE FURTHER AMENDMENTS TO THE LAW, HE SAID,
+THESE CAN BE EMBODIED IN THE PROPOSED BILL BY WAY OF REFINEMENTS TO THE BASIC LEGISLATION. +
NEW LIMIT ON DTC DEPOSITS PROPOSED
*****
A NEW LIMIT OF $100 000 ON MINIMUM DEPOSITS THAT MAY BE ACCEPTED BY REGISTERED DEPOSIT-TAKING COMPANIES WAS PROPOSED BY THE FINANCIAL SECRETARY, SIR JOHN BREMRIDGE, IN HIS BUDGET SPEECH.
THE NEW LEVEL WOULD TAKE EFFECT FROM MARCH 1, 1986.
UNDER THE DEPOSIT-TAKING COMPANIES ORDINANCE ENACTED IN 1976, DTCS WERE NOT ALLOWED TO ACCEPT DEPOSITS OF LESS THAN $50 000, SIR JOHN NOTED, ADDING THAT THE STATED OBJECTIVE WAS TO PROTECT THE SMALL DEPOSITOR BY, IN EFFECT, DEBARRING HIM FROM DEPOSITING WITH A DTC'.
SIR JOHN SAID THAT CLEARLY THE EFFECTIVENESS OF THIS MEASURE IN ACHIEVING THAT OBJECTIVE HAD BEEN ERODED BY TIME.
+DESPITE IMPROVEMENTS IN THE SUPERVISION OF THESE INSTITUTIONS, I CONSIDER THE ORIGINAL OBJECTIVE IS STILL APPROPRIATE, HE SAID.
THE LIMIT, THEREFORE, NEEDED TO BE INCREASED, AND THE CHOICE OF A NEW LEVEL WAS INEVITABLY SOMEWHAT ARBITRARY.
+WERE THE FIGURE TO BE ADJUSTED TO TAKE ACCOUNT OF INFLATION SINCE 1976, IT SHOULD NOW STAND SOMEWHAT IN EXCESS OF $100 000, + SIR JOHN SAID.
+ALTERNATIVELY, IF IT WERE JUDGED IN RELATION TO AVERAGE INCOME A FIGURE OF OVER $150 000 WOULD BE REQUIRED.
+BUT I HAVE NO WISH TO CREATE UNDUE PROBLEMS FOR REGISTERED DTCS, NOR ARBITRARILY TO DRIVE THEM OUT OF BUSINESS. I HAVE THEREFORE DECIDED TO SEEK AN INCREASE TO A ROUND $100 000. THIS PROPOSAL, AND TWO OTHERS I WILL MENTION, HAVE BEEN UNANIMOUSLY SUPPORTED BY THE DEPOSIT-TAKING COMPANIES ADVISORY COMMITTEE.
/+I SHA