XN000022-1989-03-09 — Page 2

THURSDAY, MARCH 9, 1989

CHANGES IN DEPOSIT-TAKING INSTITUTION SYSTEM ANNOUNCED

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THE GOVERNMENT WILL INTRODUCE A NUMBER OF CHANGES ΤΟ THE EXISTING SYSTEM OF DEPOSIT-TAKING INSTITUTIONS TO PROVIDE GREATER SCOPE AND STANDING FOR THE MORE SUBSTANTIAL AND WELL-RUN INSTITUTIONS AND A STRENGTHENING OF THE AUTHORISATION CRITERIA POR DEPOSIT-TAKING INSTITUTIONS.

THE CHANGES SHOULD FACILITATE THE FURTHER DEVELOPMENT OF HONG KONG AS A FINANCIAL CENTRE, AND ENHANCE THE PROTECTION AFFORDED ΤΟ DEPOSITORS.

ANNOUNCING TI

AT A PRESS CONFERENCE TODAY (THURSDAY) THE COMMISSIONER OF BANKING, MR TONY NICOLLE, SAID THESE CHANGES MADE POLLOWING A REVIEW OF THE SYSTEM AND LENGTHY CONSULTATIONS THE INDUSTRY.

WERE WITH

MR NICOLLE SAID THE EXISTING THREE-TIER SYSTEM OF DEPOSIT-TAKING INSTITUTIONS, WHICH HAD BEEN IN OPERATION SINCE 1981, COMPRISED LICENSED BANKS, LICENSED DEPOSIT-TAKING COMPANIES AND REGISTERED DEPOSIT-TAKING COMPANIES.

"THE CHANGES, IN ESSENCE, WILL REPLACE THE CATEGORIES OF LICENSED DEPOSIT-TAKING COMPANY AND REGISTERED DEPOSIT-TAKING COMPANY WITH TWO NEW AUTHORISATIONS: RESTRICTED LICENCE BANK AND DEPOSIT-TAKING COMPANY," HE SAID.

"THE AUTHORISATION REQUIREMENTS IN RESPECT OF BANKS WILL REMAIN UNCHANGED, EXCEPT THAT THE MINIMUM PAID-UP CAPITAL FOR LOCALLY INCORPORATED BANKS WILL BE INCREASED FROM $100 MILLION AT PRESENT ΤΟ $150 MILLION, HE ADDED.

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UNDER THE NEW SYSTEM, RESTRICTED LICENCE BANKS, WHICH WILL REPLACE THE PRESENT LICENSED DEPOSIT-TARING COMPANIES, WILL BE ABLE TO USE THE WORD "BANK" (AND THE LIKE) IN DESCRIBING THEIR BUSINESS IN PROMOTIONAL PUBLICATIONS AND ADVERTISEMENTS, PROVIDED THAT IT IS SUITABLY QUALIFIED

FOR EXAMPLE "MERCHANT BANK BUSINESS" OR "INVESTMENT BANKING SERVICES".

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DESCRIPTIONS SUCH AS "RETAIL" OR "COMMERCIAL WILL, HOWEVER, NOT BE ALLOWED, TO AVOID CONFUSION WITH LICENSED BANKS.

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BANKS INCORPORATED OVERSEAS. AND SEEKING AUTHORISATION RESTRICTED LICENCF BANKS WILL PE ABLE To OPERATI IN BRANCH OR SUBSIDIARY FORM.

יו וין

IP IN BRANCH FORM, AND THEIR OVERSEAS REGISTERED NAME INCLUDES THE WORD "BANK", THEY WILL BE ALLOWED TO TRADE

DE

FROM MIONG KONG WITH THE SAME NAME,

QUALIFIED IN EQUAL PROMINENCE BY "RESTRICTED LICENCE BANK" NEXT TO IT. A HONG KONG SUBSIDIARY HOWEVER, NOT BE ALLOWED TO INCORPOR VER WITH A BANKING NAME.

THE WORDS

WILL.,

/MR NICOLIE