TNAG-1487-FCO40-2044-Hong-Kong-banking-Banking-Bill-1986-1986 — Page 178

8

Clause 86: Authorized institution not to engage in trade

etc.

19.

Clause 86, basically carried over from the existing Ordinance, attempts to regulate other business

This clause undertakings of authorized institutions.

has been criticised as being too vague. On the other hand, specifying a statutory list of businesses that authorized institutions may or may not engage in would produce an unwieldy list and require extensive prior consultation with the industry. The Administration considers, therefore, that it would be more appropriate to achieve this through the issuance of guidelines under clause 7, or through licence or registration conditions, or both. The Commissioner will, after the necessary consultations, issue an early guideline to the industry on this subject when the Bill comes into operation.

Clause 87 etc.: Limitations on loans by and interests of authorized institutions

20.

Part XV regulates loans by and interest of authorized institutions. Some of the provisions apply to banks and some, with insignificant differences, apply to DTCs. We have accepted the sensible suggestion that such more or less parallel provisions should be combined to apply to all authorized institutions, for the benefit of better drafting. I will therefore be moving amendments to clauses 87, 88, 89 and 90 to this effect.. There will also be an amendment to insert a clause on the Commissioner's powers where an authorized institution places moneys with foreign banks.

This is a

clause carried over from the existing Ordinances but has been unwittingly omitted from the Bill.