XN000022-1981-10-07 — Page 27

WEDNESDAY, OCTOBER 7, 1981

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SUPERVISION OF BANKS AND DEPOSIT-TAKING COMPANIES

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MORE BILLS WILL BE INTRODUCED TO AMEND THE BANKING ORDINANCE AND THE DEPOSIT-TAKING COMPANIES ORDINANCE IN ORDER TO EXTEND TO THE IR OPERATIONS OVERSEAS THE SYSTEM OF PRUDENTIAL SUPERVISION OF HONG KONG INCORPORATED BANKS AND DEPOSIT-TAKING COMPANIES, THE GOVERNOR, SIR MURRAY MACLEHOSE ANNOUNCED TODAY (WEDNESDAY).

SPEAKING AT THE OPENING SESSION OF THE LEGISLATIVE COUNCIL, HE DISCLOSED THAT DRAFTING PROPOSALS ON DISCLOSURE REQUIREMENTS IN RELATION TO THE SHARE HOLDING OF DIRECTORS, MAJOR SHAREHOLDERS ADVISERS AND OFFICERS OF PUBLIC COMPANIES HAD ALSO BEEN PREPARED IN ORDER TO OFFER BETTER PROTECTION TO THE INVESTING PUBLIC AND TO BRING HONG KONG INTO LINE WITH OTHER FINANCIAL CENTRES.

IN HIS REPORT ON ECONOMIC MATTERS, THE GOVERNOR, SIR MURRAY MACLEHOSE, STARTED BY SAYING THAT IN THIS PRESENT SITUATION OF WORLD RECESSION HONG KONG AND ITS ECONOMY AND ITS PEOPLE WERE +FARING REMARKABLY WELL+.

+BUT THIS COMPARATIVE GOOD FORTUNE HAS BEEN UNEVENLY SPREAD AND IS NOT REFLECTED IN THE PUBLIC MOOD. THERE ARE SPECIAL REASONS FOR THIS WHICH IT IS IMPORTANT TO APPRECIATE, SIR MURRAY SAID.

THE GOVERNOR SAID THAT 1981 WAS PROVING TO BE A YEAR OF REFORM FOR THE BANKING AND DEPOSIT-TAKING INDUSTRY.

THE HONG KONG ASSOCIATION OF BANKS HAD BEEN INCORPORATED BY STATUTE TO ENABLE IT TO PLAY A GREATER PART IN THE MONETARY SYSTEM OF HONG KONG AND THAT STEPS HAD BEEN TAKEN TO LIMIT THE REGISTRATION OF NEW DEPOSIT-TAKING COMPANIES.

THE DEFINITION OF BANKING BUSINESS CONTAINED IN THE BANK ING ORDINANCE HAD BEEN AMENDED- A NEW CATEGORY OF FINANCIAL INSTITUTION (THE LICENSED DEPOSIT-TAKING COMPANY) HAD BEEN CREATED AND AFTER A TWO-YEAR TRANSITIONAL PERIOD, REGISTERED DEPOSIT-TAKING COMPANIES WOULD NO LONGER BE PERMITTED TO ACCEPT FROM THE PUBLIC DEPOSITS REPAYABLE WITHIN THREE MONTHS.

ALSO THIS YEAR, THE PRUDENTIAL LEGISLATION TO WHICH BANKS AND DEPOSIT-TAKING COMPANIES WERE SUBJECT HAD BEEN REVISED AND NEW STATISTICAL RETURNS WERE BEING RECEIVED FROM BANKS AND DEPOSIT- TAKING COMPANIES UNDER THE MONETARY STATISTICS ORDINANCE.

AT THE BEGINNING OF THIS YEAR, HE CONTINUED, TWO ORDINANCES WERE ENACTED AMENDING THE FIRE AND MARINE INSURANCE COMPANIES DEPOSIT ORDINANCE AND THE LIFE INSURANCE COMPANIES ORDINANCE, REQUIRING ALL INSURANCE COMPANIES CARRYING ON THE RELEVANT CLASSES OF BUSINESS TO HAVE A MINIMUM PAID-UP CAPITAL OF $5 MILLION AND TO MAINTAIN A SOLVENCY MARGIN.

IN CONSEQUENCE A NUMBER OF INSURANCE COMPANIES HAD BEEN REQUIRED TO INCREASE THE IR PAID-UP CAPITAL, AND SOME OTHERS HAD EITHER DROPPED OUT OF THE MARKET OR HAVE HAD THEIR AUTHORISATION WITHDRAWN.

THIS ESSENTIALLY INTER IM LEGISLATION HAD, THEREFORE, EFFECTED SOME WEEDING OUT AHEAD OF THE COMPREHENSIVE BILL.

IT WAS HOPED TO INTRODU

SIR MURRAY SAID.

THE COMPREHENSIVE BILL THIS SESSION,

JAR