Banking (Amendment) Bill
Following is the speech by the acting Secretary for Financial Services, Mrs Lessie Wei, in moving the second reading of the Banking (Amendment) Bill 1996 in the Legislative Council today (Wednesday):
Mr President,
I move that the Banking (Amendment) Bill 1996 be read a second time.
The main objective of the Bill is to amend the Banking Ordinance to provide a legal framework for the regulation of the issue of multi-purpose stored value cards and of foreign exchange and deposit brokers operating in the wholesale market. We also take the opportunity to amend other provisions of the Ordinance to bring them up to date with current requirements and streamline the appeal and penalty provisions.
Multi-purpose Stored Value Cards
We need to regulate multi-purpose stored value cards because the issue of such cards is akin to the taking of deposits or to the issue of bank notes. A proliferation of these cards would also have significant implications for the payment system and may create new opportunities for money laundering.
Restricting the issue of multi-purpose stored value cards to authorised institutions is in line with the regulatory inclination of European countries and Singapore. While the market for stored value cards is still evolving and some countries have adopted a "wait and see" approach, we see the need for early action. The later we introduce the regulatory framework, the more difficult it would be to modify any features in the market which are later found to be inappropriate. The legal framework which we propose to put in place now, however, must contain adequate flexibility so as not to stifle technology innovations.
In deciding who may issue multi-purpose stored value cards, we seek to strike a balance between the broad public interest of product innovation and convenience and the need to maintain the stability of the payment system.
We therefore propose that:
(a)
licensed banks would be deemed to be approved to issue or facilitate the issues of general purpose multi-purpose stored value cards;