XN000022-1981-05-13 — Page 6

WEDNESDAY, MAY 13, 1981

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+CLAUSE 16 SEEKS TO SHORTEN FROM 21 DAYS TO 14 DAYS THE PER FOD WITHIN WHICH COMPANIES HAVE TO SUBMIT THEIR MONTHLY AND QUARTERLY RETURNS TO THE COMMISSIONER.

+CLAUSE 23 SEEKS TO PERMIT THE FINANCIAL SECRETARY TO MAKE A LIMITED SPECIFICATION OF MONEY MARKET INSTRUMENTS AS LIQUID ASSETS FOR DEPOSIT-TAKING COMPANIES.

+PROPOSALS ARE CONTAINED IN 14 CLAUSES OF THE BILL TO REVISE THE PENALTIES FOR DIFFERENT OFFENCES.

+THE REMAINING CLAUSES OF THE BILL SET OUT CERTAIN MINOR AMENDMENTS TO THE PRINCIPAL ORDINANCE.

+CLAUSE 1 STATES THAT THIS ORDINANCE SHALL COME INTO OPERATION ON A DAY TO BE APPOINTED BY THE GOVERNOR: IT IS INTENDED THAT THIS SHOULD BE ON THE SAME DAY AS IS APPOINTED FOR THE

COMMENCEMENT OF THE DEPOS IT-TAK ING COMPANIES (AMENDMENT) (NO. 2) ORDINANCE 1981, + SIR PHILIP SAID.

DEBATE ON THIS MOTION WAS ADJOURNED.

BILLS TO KEEP IN LINE WITH REALITIES

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THE BANKING AMENDMENT) (NO. 2) BILL 1981 AND THE DEPOSIT- TAKING COMPANIES (AMENDMENT)(NO. 3) BILL 1981 DID NOT SPRING FROM ANY IMMEDIATE CONCERN ABOUT THE ADEQUACY OF THE PRESENT SYSTEM OF PRUDENTIAL SUPERVISION, BUT RATHER FROM A RECOGNITION OF THE CONTINUING NEED TO KEEP THE PROVISIONS OF THE TWO ORDINANCES IN LINE WITH PRESENT DAY REALITIES, THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE, SAID AT THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

IN MOVING THE SECOND READING OF THE BANKING (AMENDMENT) (NO. 2) BILL 1981, SIR PHILIP SAID ITS PURPOSE WAS TO UPDATE AND IMPROVE THE QUALITY OF THE PRUDENTIAL SUPERVISION APPLIED TO BANKS AND DEPOSIT-TAKING COMPANIES IN HONG KONG.

SIR PHILIP ALSO MENTIONED THAT WORK WOULD SHORTLY START ON DRAFTING FURTHER AMENDMENTS TO THE TWO ORDINANCES TO TAKE ACCOUNT OF THE GROWING ACTIVITIES OUTSIDE HONG KONG OF BANKS AND DEPOSIT- TAKING COMPANIES INCORPORATED IN HONG KONG.

+TO ENABLE HONG KONG, AS A MAJOR INTERNATIONAL FINANCIAL CENTRE, TO ACCEPT IN FULL ITS INTERNATIONAL RESPONSIBILITIES, BOTH THE BANKING AND THE DEPOSIT-TAKING COMPANIES ORDINANCE WILL NEED TO BE AMENDED TO ENABLE THE COMMISSIONER OF BANKING AND THE COMMISSIONER OF DEPOSIT-TAKING COMPANIES TO OBTAIN MORE INFORMATION THAN HE NOW RECEIVES ON THE ACTIVITIES OUTSIDE HONG KONG OF LOCALLY INCORPORATED BANKS AND DEPOSIT-TAKING COMPANIES, AND TO ENABLE HIM TO PLAY HIS FULL PART IN THE INCREASINGLY IMPORTANT

INTERNATIONAL NETWORK OF BANKING SUPERVISION, HE SAID.

/SIR PHILIP