XN000022-1993-07-07 — Page 39

WEDNESDAY,

JULY 7, 1993

25

MORE EFFECTIVE BANK SUPERVISION PROPOSED

* * * * *

A BILL THAT SEEKS то FURTHER ENHANCE BANKING SUPERVISORY STANDARDS IN HONG KONG AND то CLARIFY CERTAIN PROVISIONS OF THE BANKING ORDINANCE WAS INTRODUCED INTO THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

MOVING THE SECOND READING OF THE BANKING (AMENDMENT) BILL 1993, SECRETARY FOR FINANCIAL SERVICES, MR MICHAEL CARTLAND, SAID THE BILL ALSO AIMED TO FACILITATE THE DEVELOPMENT OF CAPITAL MARKETS.

THE

CUSTODY

LEGISLATIVE AMENDMENTS ARE INTRODUCED TO ENABLE THE HONG MONETARY AUTHORITY (HKMA) TO ESTABLISH A CENTRAL DEBT INSTRUMENTS IN PAPERLESS FORM.

KONG

SYSTEM FOR

THE BASLE FOLLOWING THE COLLAPSE OF THE BCCI GROUP WORLDWIDE,

SUPERVISORS ESTABLISHED STANDARDS FOR THE GROUPS AND THEIR CROSS-BORDER

COMMITTEE OF BANKING SUPERVISION OF INTERNATIONAL BANKING ESTABLISHMENTS IN JULY 1991.

THE OBJECTIVE OF THE NEW STANDARDS SUPERVISORY CO-OPERATION ΤΟ ENSURE THAT INTERNATIONALLY WITHOUT BEING SUBJECT то SUPERVISION.

SEEK

IS TO

WORLDWIDE NO BANK CAN OPERATE EFFECTIVE CONSOLIDATED

ALTHOUGH HONG KONG'S FRAMEWORK OF CONSOLIDATED SUPERVISION LARGELY CONFORMS WITH THE MINIMUM STANDARDS, THE EXISTING PROVISIONS

ESTABLISHMENT GOVERNING PRIOR APPROVAL FOR THE

OF OVERSEAS BANKING ENTITIES BY LOCALLY INCORPORATED AUTHORISED INSTITUTIONS FALL SHORT OF THE STANDARDS, MR CARTLAND SAID.

BE

OR

THE BILL PROPOSES THAT A LOCALLY INCORPORATED INSTITUTION, ITS LOCALLY INCORPORATED HOLDING COMPANY,

REQUIRED TO SEEK THE HKMA'S PRIOR APPROVAL BEFORE ESTABLISHING A BANKING SUBSIDIARY OVERSEAS.

AS REGARDS THE PLAN FOR ESTABLISHING A CENTRAL CUSTODY SYSTEM TO PERFORM THE FUNCTIONS OF A CENTRAL CUSTODIAN AND CLEARING AGENT FOR

GIVE DEBT INSTRUMENTS, THE PROPOSED AMENDMENTS WILL

RECOGNITION TO INSTRUMENTS IN PAPERLESS THE RIGHTS AND INTERESTS IN SPECIFIED DEBT FORM.

UNDER THE

DEBT PROPOSED SYSTEM, A PRIVATE SECTOR SSUER OF

PAPERS OR INSTRUMENTS SUCH AS CERTIFICATES OF DEPOSITS, COMMERIAL FLOATING RATE

BE NOTES WILL ISSUE ONE GLOBAL INSTRUMENT WHICH WILL HELD AS BEARER BY THE HKMA.

COMPUTER THE TRANSFER

HKMA THE

ON WILL, ON BEHALF OF ACCEPTABLE DEALERS,

FACILITATE SYSTEM INTERESTS IN THOSE GLOBAL INSTRUMENTS AND

SUCH OF

INTERESTS, THIS WOULD HELP SPEED UP THE SETTLEMENT PROCESS AND REDUCE SETTLEMENT RISK.

RECORD

A

THE BILL ALSO INTRODUCES A REQUIREMENT INCORPORATED INSTITUTIONS PUBLISH THEIR AUDITED IN NEWSPAPERS WITHIN FOUR MONTHS OF THEIR FINANCIAL YEAR END, OF SIX MONTHS.

THAT

LOCALLY FINANCIAL STATEMENTS INSTEAD

/MR CARTLAND