3.
Sale of $20 notes twice their face value not unlawful
The following is a question by Dr the Hon Law Cheung-kwok and a written reply by the Secretary for Financial Services, Mr Rafael Hui, in the Legislative Council today (Wednesday):
Question:
The Hongkong Bank recently sold some new $20 notes at a price about twice their face value. In this connection, will the Government inform this Council whether:
(a) such activity is in breach of the Bank Notes Issue Ordinance; and
(b) it has information to show that the Hongkong Bank had sold new notes at a price in excess of their face value in the past five years; if so, what was the total amount of new notes sold and what were the profits so generated?
Reply:
(a) Nothing in the laws of Hong Kong requires bank notes to be sold at their face value. There is indeed an established market for the sale of new and used notes as collectors' items where notes are transacted at prices different from their face value. The action of the Hongkong Bank is not therefore in breach of the Bank Notes Issue Ordinance or any other ordinances.
(b) We do not require a note-issuing bank to report specific statistics on proceeds it derives from issue of new bank notes. Any profits generated from such an activity will feature in the normal way in the bank's accounts. The information is not otherwise available.
End/Wednesday, October 25, 1995