- 6 -
Under the existing Bill, special purpose vehicles whose principal business consists of issuing or facilitating the issue of multi-purpose stored value cards may apply for authorization as a restricted licenced bank or a deposit-taking company. The Bills Committee was concerned that such an arrangement might cause confusion. To address this concern, I will move an amendment to provide that a special purpose vehicle should only be authorized as a deposit-taking company.
Another point raised by the Bills Committee was that there should be fair competition among issuers of stored value cards and that issuers should be prohibited from unreasonable anti-competition practices. The Administration fully endorses this principle. It has been our policy to support healthy competition and to maintain a level playing field for market participants. The Monetary Authority will formally bring this to the attention of the banking industry and all authorized or exempt issuers of multi- purpose stored value cards.
The existing Bill provides for the Monetary Authority to exempt certain issuers from authorization. The Bills Committee emphasized the importance of allowing non- bank entities to issue stored value cards and to improve the efficiency of their services without compromising the integrity of the payment system. We fully agree with this principle. The Monetary Authority is now formulating the detailed exemption criteria in the light of the principle and will consult potential non-bank issuers. The criteria will be published in the form of guidelines to applicants. We will review the exemption policy from time to time in light of prevailing circumstances.
The Bill proposes that all money brokers would be required to take up membership of the Hong Kong Foreign Exchange and Deposit Brokers Association so that all money brokers would be subject to the Code of Conduct to be issued by the Association. The Bills Committee considered that this arrangement might restrict entry of new comers as money brokers. I will be moving an amendment to provide that a money broker approved by the Monetary Authority need not be a member of the Association and the Monetary Authority will issue a guideline on the Code of Conduct which will apply to all money brokers approved by the Monetary Authority.
Mr President, I will also move a number of other detailed amendments of a more technical nature to improve the provisions of the Bill. With these remarks, I commend the Bill to Members.
End