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FRIDAY, NOVEMBE 4, 1977
ON THE THIRD CONSIDERATION - THE CEVIOUS NEED TO PROTECT HONG KONG'S REPUTATION AS A FINANCIAL CENTRE - MR. HADDON-CAVE SAID: IF ADEQUATE WEIGHT IS GIVE.. TO THE FIRST TWO CONSIDERATION3, THEN HONG KONG'S REPUTATION WILL BE LARGELY SECURED. BUT NOT QUITE ON THE BASIS OF A COHERENT AND CONSISTENT PHILOSOPHY TOWARDS THE FINANCIAL SERVICES SECTOR, THE GOVERNMENT MUST ALSO DEVELOP APPROPRIATE POLICIES IN THE FIELDS, FOR EXAMPLE, OF FISCAL ADMINISTRATION, IMMIGRATION AND LICENSING SYSTEMS.+
R. HADDON-CAVE ILLUSTRATED THE WAY IN WHICH THESE THREE CONSIDERATIONS HAD BEEN APPLIED IN PRACTICE BY EXAMINING GOVERNMENT POLICY IN RESPECT OF BANK ING, DEPOSIT TAKING COMPANIES, THE STOCK MARKET, COMMODITIES TRADING AND INSURANCE.
ON GOVERNMENT'S ATTITUDE TO BANKING, MR. HADDON-CAVE SAID IT WOULD BE FAIR TO CLAIM THAT THE 1964 BANKING ORDINANCE HAD OPERATED IN SUCH A WAY AS TO MEET THE THREE CONSIDERATIONS UNDERLYING GOVERNMENT POLICY: THE ECONOMY GENERALLY HAD BEEN SAFEGUARDED, DEPOSITORS HAD ENJOYED PROTECTION AND YET IT WAS CLEAR THAT THE BANKS HAD SUFFICIENT FREEDOM TO OPERATE ON THEIR OWN INITIATIVE IN A COMPETITIVE ENVIRONMENT.
ON THE TOPIC OF DEPOSIT-TAKING COMPANIES, MR. HADDON-CAVE SAID THE ORDINANCE HAD BEEN CRITICISED, AT ANY RATE BY THE BANKS, ON THE GROUNDS THAT IT DID NOT GO FAR ENOUGH IN PROTECTING DEPOSITORS AND THAT DEPOSIT-TAKING COMPANIES, ESPECIALLY THOSE ENGAGED IN THE BUSINESS OF WHOLESALE EANK ING, HAD AN UNFAIR ADVANTAGE OVER THE LICENSED BANKS, PARTICULARLY IN THEIR FREEDOM FROM LIQUIDITY REQUIREMENTS.
HE SAID THAT THE ACTIVITIES OF THE DEPOSIT-TAKING COMPANIES WERE GROWING AND, TO PROTECT THE ECONOMY GENERALLY RATHER THAN DEPOSITORS IN PARTICULAR, PROPOSALS MOULD SHORTLY DE FUT TO THE EXECUTIVE COUNCIL TO PROVIDE FOR MONTHLY RETURNS TO BE SUBMITTED TO THE COMMISSIONER OF BANKING'S OFFICE. FOR POWERS OF INSPECTION OF COMPANIES BY THE COMMISSIONER AND FOR LIQUIDITY REQUIREMENTS SIMILAR TO THOSE REQUIRED IN THE BANKING ORDINANCE. IT WAS ALSO GOVERNMENT'S INTENTICA TO PERMIT CERTAIN LARGE INTERNATIONAL EANKS TO REGISTER UNDER THE DEPOSIT TAKING COMPANIES ORDINANCE AND OPEN BRANCHES IN HONG KONG +SUBJECT TO OUR BEING ABLE TO DEVISE ADEQUATE SAFEGUARDS.+
ON THE 1974 SECURITIES ORDINANCE, MR. HADDON-CAVE SAID: +GENERALLY, I THINK THE ORDINANCE HAS BEEN A SUCCESS. THE REALLY BLATANT ABUSES SO APPARENT FIVE YEARS AGO ARE NO LONGER WITH US.+
MR. HADDON-CAVE SAID THE CODE CI! TAKE OVER AND MERGERS PUBLISHED IN 1975 MAD ORKED MELL, ADDING THAT THE COMMISSIONER FOR SECURITIES WAS CURRENTLY REVIEWING THE CODE „ITH THE READY ASSISTANCE OF THE FINCIAL COMMUNITY. HE SAID A CODE CN UNIT TRUSTS AND MUTUAL FUNDS HAD PEACHED AN ADVANCED STAGE AND SHOULD BE BROUGHT INTO (PERATION BEFORE THE END OF THE YEAR.
MR. HADDON-CAVE SAID THE CODE THE UNIT TRUSTS CODE WEES TH MOMENT. +BUT I CAN SEE OTHERS BE!
TAKE OVERS AND VERGERS AND
L
WE HAD IN WIND AT THE
AS TIME PASSES.+
/THE FINANCIAL SECRETARY
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