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As regards (b), advertisements by banks on their products do not need to be pre-approved. Nevertheless. the Monetary Authority recognises the credit, legal and reputational risks to the banks should they engage in derivatives transactions with customers who do not fully understand the risks involved. In ssuing a guideline on risk management of derivatives in December 1994. the Monetary Authority therefore reminded banks that for their own protection. they should have policies and procedures reasonably to ensure that their customers have the capability to understand the nature and risks of derivatives transactions into which they enter. They should also provide the customers with sufficient information to help them understand the risks. The Monetary Authority has followed this up in particular cases by means of on-site examinations.
On (c), provisions in the Banking Ordinance ensure that banks manage their risks properly so as to safeguard the stability of the banking system and protect the interests of depositors. However, banking supervision is not generally designed to protect bank customers in respect of specific products Furthermore, guidance of the kind described in the previous paragraph will help to achieve the objective of protecting not only the banks but also their customers against imprudent marketing of derivative products. In general, to safeguard their own interest investors would have to be aware of the risks associated with any of their investment activities and to seek professional advice if necessary.
End/Wednesday, March 22, 1995
Judges too lenient
Following is a question by the Hon David Li Kwok-po and a written reply by the Attorney General, Mr Jeremy Mathews. in the Legislative Council today (Wednesday):
Question:
According to a recent survey commissioned by a local English newspaper, more than half of the people of Hong Kong think the territory's judges are too lenient with criminals. Will the Government inform this Council whether it is considering or will consider introducing legislation to require the courts to impose specific sentences fixed by law for serious crimes such as murder. manslaughter and rape?