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FRIDAY, MARCH 7, 1986
THE COMMISSIONER'S ROLE
THE BILL SPELLS OUT EXPLICITLY THE COMMISSIONER OF BANKING'S FUNCTIONS, WHICH ARE PRINCIPALLY TO PROMOTE THE GENERAL STABILITY AND EFFECTIVE WORKING OF THE BANKING SYSTEM. HE IS RESPONSIBLE AMONG OTHER DUTIES - FOR SUPERVISING COMPLIANCE WITH THE PROVISIONS OF THE ORDINANCE, ENSURING THAT AUTHORISED INSTITUTIONS ARE OPERATED IN A RESPONSIBLE, HONEST AND BUSINESS-LIKE MANNER, AND PROMOTING AND ENCOURAGING PROPER STANDARDS OF CONDUCT AND SOUND BUSINESS PRACTICES AMONGST THESE INSTITUTIONS.
THE COMMISSIONER'S DUTIES REFLECT A DIFFERENT EMPHASIS IN THE NEW APPROACH TO PRUDENTIAL SUPERVISION - ONE THAT RELIES MORE ON HIS DISCRETION AND QUALITATIVE JUDGEMENT THAN PREVIOUSLY. SAFEGUARDS ARE PROVIDED THROUGHOUT THE BILL BY WAY OF APPEALS TO THE FINANCIAL SECRETARY OR THE GOVERNOR IN COUNCIL.
ALSO COUNTER BALANCING THE COMMISSIONER'S EXPANDED ROLE ARE THE REPORTING REQUIREMENTS. HE IS REQUIRED TO PROVIDE AN ANNUAL REPORT TO THE GOVERNOR IN COUNCIL ON THE WORKING OF THE BILL AND THE ACTIVITIES OF HIS OFFICE DURING THE YEAR. THE GOVERNOR IN COUNCIL MAY PUBLISH THE REPORT.
IN ADDITION, THE GOVERNOR HAS THE POWER TO REQUEST A REPORT FROM THE COMMISSIONER AT ANY TIME.
AUDIT
THE BILL EXTENDS THE AUDIT REQUIREMENTS PRESENTLY APPLICABLE TO BANKS TO DEPOSIT-TAKING COMPANIES IN PARTICULAR, THE COMMISSIONER WILL HAVE THE POWER TO APPOINT A SECOND AUDITOR FOR DEPOSIT-TAKING COMPANIES.
TRIPARTITE MEETINGS ARE PROVIDED FOR BETWEEN THE BOARD OF AN INSTITUTION, ITS AUDITORS AND THE COMMISSIONER WHERE THE AFFAL OF THE INSTITUTION WARRANT SUCH A MEETING, AND A MEETING BETWEEN ANY TWO PARTIES CAN PROCEED NOTWITHSTANDING NON-ATTENDANCE BY Tn. THIRD.
THE BILL ALSO EMPOWERS THE COMMISSIONER TO DEAL WITH WEAKNESSES OR MISCONDUCT IN AUDITS, BY REFERRING TO THE DISCIPLINARY COMMITTEE OF THE SOCIETY OF ACCOUNTANTS ANY CASES OF NEGLIGENCE OR SERIOUS MISCONDUCT BY THE AUDITORS OF AN AUTHORISED INSTITUTION.
REGULATION OF OWNERSHIP AND MANAGEMENT
THE BILL GIVES THE COMMISSIONER POWER OF CONTROL OVER SUBSTANTIAL OWNERSHIP AND MANAGEMENT OF BANKS AND DEPOSIT-TAKING COMPANIES INCORPORATED IN HONG KONG.
/AFTER COMMENCEMENT