XN000022-1991-04-26 — Page 11

FRIDAY, APRIL 26, 1991

10

AMENDMENTS TO BANKING ORDINANCE Gazetted

*

**

THE BANKING

1991 WHICH SEEKS TO (NO. 2) BILL (AMENDMENT}

BETTER INTRODUCE AMENDMENTS TO THE BANKING ORDINANCE REQUIRED FOR THE

IN THE GAZETTE TODAY WAS PUBLISHED OF SUPERVISION

THE INDUSTRY (FRIDAY).

THE PROPOSED AMENDMENTS INCLUDE IMPROVEMENTS TO THE FOR REGULATING CHANGES OF CONTROL OF LOCALLY INCORPORATED INSTITUTIONS AND UPDATING THE REQUIREMENTS ON LARGE LOANS RISK CONCENTRATIONS.

PROVISIONS AUTHORISED OTHER

AND

REGULATING

"THERE WERE SHORTCOMINGS IN THE EXISTING SYSTEM FOR CHANGES OF CONTROL OF AUTHORISED INSTITUTIONS," A GOVERNMENT SPOKESMAN SAID.

"FOR INSTANCE, THE PRESENT REGIME DOES NOT ENABLE CONSENT TO BE NO WITHDRAWN FROM A CONTROLLER WHEN THERE IS EVIDENCE THAT HE IS LONGER FIT AND PROPER.

OF

CENT

THERE "SECONDLY,

CONTROL IS NO

OVER THE ACQUISITION SHAREHOLDINGS, WHICH STOP SHORT OF FULL CONTROL (THAT IS 10 PER

COMPANY. INCREASINGLY TO 49 PER CENT), IN AN INSTITUTION'S HOLDING INSTITUTIONS ARE BECOMING PART OF GROUPS, UNDER A HOLDING COMPANY.

"THIRDLY, IT IS ONLY AFTER AN OWNER HAS ACQUIRED AN INTEREST IN AN INSTITUTION THAT HE IS FORMALLY REQUIRED TO SEEK PERMISSION.

"THE

COMMISSIONER OF BANKING THEREFORE CANNOT PREVENT WHO ARE NOT FIT AND PROPER FROM BECOMING CONTROLLERS INSTITUTIONS," THE SPOKESMAN SAID.

PERSONS

OF AUTHORISED

70

BY REPEALING CLAUSE 18 OF THE BILL DEALS WITH THESE PROBLEMS SECTION 70 OF THE BANKING ORDINANCE AND SUBSTITUTING NEW SECTIONS TO 70D.

IS EMPOWERED TO "UNDER THE NEW PROVISION, THE COMMISSIONER OBJECT, ON CERTAIN SPECIFIED GROUNDS, TO PERSONS BECOMING OR REMAINING

IN INCORPORATED

HONG KONG. CONTROLLERS OF AUTHORISED INSTITUTIONS

THE SPOKESMAN SAID. APPROPRIATE SANCTIONS ARE ALSO INTRODUCED,

AMENDMENTS ARE ALSO MADE BY REPEALING SECTION 72 UNDER 20 AND AMENDING SECTION 72A UNDER CLAUSE 21.

CLAUSE

"THE PROPOSALS ARE LARGELY BASED ON PROVISIONS CONTAINED IN THE

THE SPOKESMAN SAID. INSURANCE COMPANIES ORDINANCE,

ANOTHER AREA WHERE MAJOR CHANGES ARE CONTEMPLATED IS PART XV OF TO A THE ORDINANCE. THIS PART LIMITS THE SIZE OF INDIVIDUAL LOANS

CEILINGS ARE ALSO PLACED ON SINGLE BORROWER, OR GROUP OF BORROWERS. OTHER INVESTMENT INTERESTS OF AUTHORISED INSTITUTIONS.

/PROPOSED AMENDMENTS