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WEDNESDAY, MARCH 19, 1986
NOTING THAT SOME FACILE PUBLIC COMMENTS ON THE BILL SINCE IT WAS GAZETTED HAD FOCUSED ON THE COMMISSIONER'S POWERS, SIR JOHN SAID THE EXISTING LEGISLATION ALREADY GAVE VERY WIDE POWERS OF DISCRETION TO THE COMMISSIONER.
+IT COULD NOT BE OTHERWISE IF HE IS TO CARRY OUT EFFECTIVELY HIS SUPERVISORY DUTIES.
+THESE POWERS ARE IN LINE WITH, INDEED ARE MODEST COMPARED WITH, THOSE WHICH APPLY IN OTHER MAJOR BANKING CENTRES,+ HE SAID.
SIR JOHN ADDED THAT SAFEGUARDS AGAINST ABUSES IN THE COMMISSIONER'S EXERCISE OF HIS DISCRETION WERE PROVIDED THROUGHOUT THE BILL - BY WAY OF APPEALS TO THE FINANCIAL SECRETARY OR TO THE GOVERNOR-IN-COUNCIL.
IT WAS ALSO PROPOSED THAT THE COMMISSIONER SHOULD PROVIDE AN ANNUAL REPORT TO THE GOVERNOR-IN-COUNCIL, WHO MIGHT PUBLISH THE REPORT, IN PART OR IN WHOLE, HE SAID.
ON THE QUESTION OF AUDIT, SIR JOHN SAID THERE WAS A COMMON APPRECIATION OF THE RESPECTIVE ROLES OF THE AUDITOR AND SUPERVISOR, AND HOW THESE SEPARATE ROLES CAME TOGETHER TO ENABLE PROBLEMS TO BE DETECTED BEFORE IT WAS TOO LATE.
+TO THIS END, THE BILL PROVIDES FOR ANY OF THE THREE PARTIES MANAGEMENT, COMMISSIONER, AUDITOR TO CALL A TRIPARTITE MEETING TO DISCUSS MATTERS RELATING TO THE INSTITUTION, AND FOR THE MEETING TO BE HELD NOTWITHSTANDING NON-ATTENDANCE BY ANY ONE OF THE THREE PARTIES, HE SAID.
TO DEAL WITH WEAKNESSES IN AUDIT, SIR JOHN SAID, THE COMMISSIONER MIGHT IN FUTURE REFER TO THE DISCIPLINARY COMMITTEE OF THE SOCIETY OF ACCOUNTANTS ANY CASES OF NEGLIGENCE OR SERIOUS MISCONDUCT BY THE AUDITOR - SOMETHING HE COULD NOT DO AT PRESENT.
ACCORDING TO THE BILL, THE AUDIT REQUIREMENTS PRESENTLY APPLICABLE ONLY TO BANKS WOULD BE EXTENDED TO DEPOSIT-TAKING COMPANIES. THE COMMISSIONER WOULD ALSO HAVE THE POWER TO APPOINT A SECOND AUDITOR FOR DEPOSIT-TAKING COMPANIES.
TWO PROPOSALS WERE MADE RELATING TO THE CONTROL ON OWNERSHIP AND MANAGEMENT OF BANKS AND DTCS INCORPORATED IN HONG KONG.
FIRSTLY, AFTER THE COMMENCEMENT OF THE BILL, ANY PERSON WHO, INDIVIDUALLY OR IN CONCERT WITH OTHERS, ACQUIRED SHARES WHICH BROUGHT HIS HOLDING TO 10 PER CENT OR MORE OF THE VOTING SHARES OF THE INSTITUTION, WOULD NEED THE COMMISSIONER'S APPROVAL BEFORE HE WAS ABLE TO EXERCISE HIS VOTING RIGHTS IN THOSE ACQUIRED SHARES.
/SECONDLY, AFTER