G.F. 316
#NCLASSIFIED
37.
Under the Deposit-taking Companies Ordinance, which was enacted in 1976, DTCs are not allowed to accept deposits of less than HK$50,000. The stated objective was to protect the small depositor by,
by, in effect, debarring him from depositing with a
DTC.
38.
Clearly the effectiveness of this measure in achieving that objective has been eroded by the passage of time. Despite improvements in the supervision of these institutions, I consider the original objective is still appropriate.
39.
The limit therefore needs to be increased. The choice
of a new level is inevitably somewhat arbitrary. Were the figure to be adjusted to take account of inflation since 1976,
it should now stand somewhat in excess of $100,000. Alternatively, if it were judged in relation to average income a figure of over $150,000 would be required. But I have no wish to create undue problems for registered DTC's, nor arbitrarily
to drive them out of business. I have therefore decided to seek an increase to a round $100,000. This proposal, and two others
I will mention, have been unanimously supported by the Deposit-taking Companies Advisory Committee. I shall therefore
in due course be approaching the Governor in
in Council with a recommendation that he should order the necessary amendment to the First Schedule of the Deposit-taking Companies Ordinance. To allow an adjustment period, I will propose that the new limit take effect on 1 March 1986. In other words, I am today giving 12 months' notice. For the avoidance of doubt let me also say that any deposits in the $50,000 to $100,000 bracket already in place with registered DTCs when the new limit takes effect would be permitted to run to maturity.
40.
No change is proposed to the $500,000 threshold for deposits with licensed DTCs, which dates only from 1981 and still adequately reflects a reasonable definition of wholesale business. This was the original intention.
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