XN000022-1983-12-07 — Page 3

WEDNESDAY, DECEMBER 7, 1983

AMENDMENTS TO DTC, BANKING BILLS MOVED

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FIVE AMENDMENTS TO THE DEPOSIT-TAKING COMPANIES (AMENDMENT) BILL 1983 AND THE BANKING (AMENDMENT) BILL 1983 WERE MOVED BY THE HON BILL BROWN AT THE LEGISLATIVE COUNCIL MEETING TODAY.

THE BILLS HAD BEEN STUDIED BY THE LEGCO MONETARY POLICY GROUP WHICH HAD ALSO HELD DISCUSSIONS WITH THE ADMINISTRATION ON THE REPRESENTATIONS RECEIVED BY UMELCO.

MR BROWN IS THE CONVENER OF THE GROUP WHICH COMPRISES THE HON CHARLES YEUNG, THE HON WONG PO-YAN, THE HON STEPHEN CHEONG, THE HON MARIA TAM AND THE HON PETER POÓN.

SPEAKING AT THE RESUMED DEBATE OF THE BILLS, MR BROWN STRESSED THAT THERE HAD BEEN NO REAL CONFLICT OF INTEREST IN HIS ROLES AS THE CONVENER OF THE GROUP AND AS AN EXECUTIVE WITH BOTH A BANK AND DEPOSIT-TAKING COMPANIES SINCE THE FINANCIAL COMMUNITY GENERALLY SUPPORTED THE AIMS OF THE BILLS AND HAD NO OBJECTIONS TO ANY OF THE PRINCIPLES INVOLVED.

+ALTHOUGH BANKS AND DEPOSIT-TAKING COMPANIES RAISED NO OBJECTIONS TO ANY OF THE PRINCIPLES INVOLVED IN THESE BILLS, OTHER MEMBERS OF THE BUSINESS COMMUNITY DID HAVE SOME RESERVATIONS, + HE ADDED.

HE WENT ON TO GIVE AN ACCOUNT OF THE AMENDMENTS THAT HE WOULD BE PROPOSING AT THE COMMITTEE STAGE.

HE MENTIONED THE STRONG OBJECTIONS RAISED BY THE HONG KONG SOCIETY OF ACCOUNTANTS ON BEHALF OF AUDITORS THAT THE AMENDMENTS PROPOSED UNDER CLAUSES 17 AND 13 RESPECTIVELY OF THE AMENDMENT BILLS WOULD REPRESENT A BREACH OF THE NORMAL AUDITOR- CLIENT RELATIONSHIP.

*THE SUBJECT CLAUSES PUT THE AUDITOR IN THE DIFFICULT POSITION OF BEING UNDER A DUTY TO REPORT TO THE COMMISSIONER ON MATTERS WHICH MAY INVOLVE QUESTIONS OF OPINION, AND IN REGARD TO POSSIBLE CONTRAVENTIONS OF THE SPECIFIED PROVISIONS OF THE ORDINANCES THE AUDITOR MAY NOT BE QUALIFIED OR IN A POSITION TO DECIDE ON WHAT IS OFTEN A QUESTION OF LAW, MR BROWN SAID.

HE SAID HE WAS HAPPY THAT THE ADMINISTRATION HAD AGREED TO MODIFY THE ORIGINAL REQUIREMENTS.

*THE REVISED AMENDMENTS PROVIDE THAT THE COMMISSIONER MAY REQUIRE AT ANY TIME FOR RETURNS TO HIM FROM FINANCIAL INSTITUTIONS, SUBMITTED UNDER SECTIONS 20(3) AND 38(2A) OF THE RESPECTIVE PRINCIPAL ORDINANCES, TO BE ACCOMPANIED BY A CERTIFICATE SIGNED BY BY THE AUDITOR NOT ONLY TO THE EFFECT THAT THE RETURNS ARE CORRECTLY COMPILED FROM THE BOOKS AND RECORDS, BUT ALSO THAT IN THE OPINION OF THE AUDITOR THERE IS NO APPARENT CONTRAVENTION OR OTHER MATTERS WHICH MATERIALLY AFFECTED THE FINANCIAL POSITION OF THE FINANCIAL

INSTITUTION, HE EXPLAINED.

/THE SECOND