XN000022-1991-04-26 — Page 12

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FRIDAY, APRIL 26, 1991

PROPOSED AMENDMENTS TO PART XV INCLUDE:

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RESTRICTING THE APPLICATION OF MANY OF THE PROVISIONS OF THE ART TO AUTHORISED INSTITUTIONS INCORPORATED IN HONG KONG;

CHANGING THE EXISTING METHOD FOR CALCULATING THE VARIOUS LIMITS UNDER PART XV BY REFERENCE ΤΟ THE "CAPITAL BASE" INSTEAD OF "CAPITAL AND RESERVES" OF INSTITUTIONS; AND

EMPOWERING THE COMMISSIONER TO APPLY LARGE EXPOSURE LIMITS TO INSTITUTIONS ON A GROUP BASIS.

REGIME

"THE PROPOSED CHANGES ALSO AIM TO BRING THE REGULATORY IN LINE WITH RECENT RECOMMENDATIONS OF THE BASLE COMMITTEE ON BANKING SUPERVISION, THE SPOKESMAN SAID.

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"THE ORDINANCE CONTAINS CERTAIN RESTRICTIONS ON ADVERTISEMENTS BY OVERSEAS DEPOSIT-TAKERS WHICH ARE NOT AUTHORISED IN HONG KONG.

ΤΟ

HONG

НЕ SAID SINCE THERE WAS NO EXCHANGE CONTROL BARRIERS KONG RESIDENTS DEPOSITING WITH OVERSEAS DEPOSIT-TAKERS, IT WAS APPROPRIATE ΤΟ ALLOW SUCH BANKS TO ADVERTISE, SUBJECT ΤΟ CERTAIN SAFEGUARDS.

UNDER SECTION 92 OF THE ORDINANCE, IT IS AN OFFENCE TO ISSUE CERTAIN ADVERTISEMENTS IN RELATION TO DEPOSITS.

CLAUSE 36 AMENDS THE SECTION TO PROVIDE THAT IT SHALL NOT APPLY TO AN ADVERTISEMENT FOR DEPOSITS OUTSIDE HONG

THE KONG IF ADVERTISEMENT COMPLIES WITH THE REQUIREMENTS OF THE NEW FIFTH SCHEDULE AT CLAUSE 53.

THE SCHEDULE SPECIFIES THAT THE ADVERTISEMENT SHOULD CONTAIN, AMONG OTHER THINGS, KEY INFORMATION ABOUT THE COMPANY AND A WARNING THAT IT IS NOT AUTHORISED UNDER THE ORDINANCE AND IS NOT SUBJECT TO THE SUPERVISION OF THE COMMISSIONER.

"THESE RESTRICTIONS ARE SIMILAR TO THOSE CURRENTLY IN FORCE UNDER THE UK BANKING ACT,' THE SPOKESMAN SAID,

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CERTAIN AMENDMENTS ARE ALSO MADE TO THE SECRECY PROVISIONS UNDER SECTIONS 120 AND 121 OF THE ORDINANCE.

"THE GLOBALISATION OF BANKING BUSINESS AND THE EMERGENCE OF FINANCIAL CONGLOMERATES CALL FOR CLOSER CONTACT BETWEEN BANKING AND OTHER FINANCIAL REGULATORS, HE SAID.

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"THE PROPOSED AMENDMENTS TO THE SECRECY PROVISIONS ARE IN LINE WITH RECOMMENDATIONS OF THE BASLE COMMITTEE," HE ADDED.

CLAUSES 40 AND 41 RESPECTIVELY WIDEN THE CIRCUMSTANCES IN WHICH THE COMMISSIONER MAY DISCLOSE INFORMATION ON AUTHORISED INSTITUTIONS.

"THESE INCLUDE PERMITTING DISCLOSURE ΤΟ OTHER DOMESTIC REGULATORS AND OVERSEAS BANKING REGULATORS ON THE GROUND OF ENABLING OR ASSISTING

TO PERFORM THEIR FUNCTIONS AND

THE REMOVING RESTRICTION THAT AN OVERSEAS BANKING REGULATOR MUST HAVE A DIRECT SUPERVISORY ROLE OVER THE INSTITUTION CONCERNED," THE SPOKESMAN SAID.

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