XN000022-1983-08-10 — Page 3

WEDNESDAY, AUGUST 10, 1983

DTC, BANK BILLS BENEFIT ALL BREMRIDGE

*****

-

TWO BILLS INTRODUCED INTO THE LEGISLATIVE COUNCIL TODAY WOULD PROVIDE IMPROVED LEGISLATIVE FRAMEWORK FOR DEPOSIT-TAKING COMPANIES AND BANKS, TO THE INTERESTS OF DEPOSITORS AND THE COMMUNITY AS A WHOLE, THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, SAID.

THE BILLS ARE THE DEPOSIT-TAK I NG COMPANIES (AMENDMENT) BILL 1983 AND THE BANKING (AMENDMENT) BILL 1983.

ON MOVING THE SECOND READINGS OF THE BILLS, SIR JOHN SAID, +NO DOUBT AS THE YEARS GO BY WE SHALL FIND OTHER AREAS THAT REQUIRE IMPROVEMENT.+

A CAREFUL REVIEW OF THE DEPOSIT-TAKING COMPANIES ORDINANCE AND THE BANKING ORDINANCE HAD BEEN CARRIED OUT, AND PROPOSED AMENDMENTS TO THEM WERE CONTAINED IN THE BILLS, SIR JOHN POINTED OUT.

THESE AMENDMENTS INCLUDE SOME PROPOSALS WHICH ARISE PRINCIPALLY FROM EXPERIENCES AROUND THE TURN OF THIS YEAR, WHEN A SMALL NUMBER OF DTC'S FAILED.

+LET ME ADD EN PASSANT THAT DESPITE ALARMIST AND OFTEN IRRESPONSIBLE CRITICISM THE IMPLEMENTATION OF THE THREE-TIERED BANKING SYSTEM HAS NOW BEEN COMPLETED AS PLANNED WITH LITTLE TROUBLE. OUR BANKING ARRANGEMENTS ARE SOUNDER AS A RESULT, HE SAID.

SIR JOHN THEN EXPLAINED THE PROPOSED AMENDMENTS TO THE DTC ORDINANCE WHERE THE NEED FOR ACTION WAS MOST CLEARLY IDENT IF (ED+.

THE BILL PROVIDES FOR THE FINANCIAL SECRETARY TO SUSPEND A LICENCE IN THE SAME WAY AS THE COMMISSIONER OF DEPOS IT-TAK ING COMPANIES MAY ALREADY SUSPEND A REGISTRATION.

+1 PROPOSE MOREOVER THAT ALL THE CIRCUMSTANCES WHICH ARE GROUNDS FOR REVOCATION SHOULD ALSO BE GROUNDS FOR SUSPENSION, WHETHER OF A REGISTRATION OR A LICENCE, HE SAID.

HE ADDED THAT THIS SHOULD AVOID A REPETITION OF AN AWKWARD SITUATION WHICH AROSE AT THE BEGINNING OF THIS YEAR, WHEN THE COMMISSIONER FOUND THAT HE COULD NOT SUSPEND A REGISTRATION DURING THE STATUTORY NOTICE PERIOD BEFORE REVOKING IT.

THE BILL ALSO AIMS TO CLARIFY AND TIGHTEN SOME OF THE RESTRICTIONS ON LENDING BY A DTC TO SINGLE CUSTOMERS OR GROUPINGS AND, PARTICULARLY IN THE CASE OF A REGISTERED DTC, TO DIRECTORS, THEIR RELATIVES AND CONNECTED ENTITIES.

IT CONTAINS A NEW PROVISION, GIVING THE COMMISSIONER DISCRETIONARY POWER TO LIMIT PLACEMENTS BY EITHER CATEGORY OF DTC'S WITH FOREIGN BANKS.

UNDER THE BILL. AN ENTIRELY NEW SECTION OF THE ORDINANCE IS PROPOSED, WHEREBY THE FINANCIAL SECRETARY MAY APPOINT AN INSPECTOR TO INVESTIGATE THE AFFAIRS OF A DTC, OR A FORMER DTC, AND ITS DIRECTLY ASSOCIATED COMPANIES.

/IT WILL