TNAG-1649-FCO40-2296-Hong-Kong-Commissioner-of-Banking-s-annual-report-for-1986--1987 — Page 27

4.

BANKING (AMENDMENT) BILL 1987

Clause 3(b) deletes paragraph (n) of section 3(1) of the principal dinance. Section 13(1) of the principal Ordinance already provides for an exemption from section 12(1) of the principal Ordinance. No exemption is to be given for any other provision of Part III of the principal Ordinance. Thus paragraph (n) is redundant and deleted accordingly.

5. Clause 4 amends section 13(1) of the principal Ordinance to provide that an exemption from section 12(1) of the principal Ordinance (which is the prohibition against any person other than an authorized. institution taking deposits in Hong Kong) may also include an exemption from section 92(1) of the principal Ordinance (which is the prohibition against issuing advertisements relating to the taking of deposits).

6. Clauses 5(b), 7(b) and 9(b) respectively amend sections 18(1), 21(3)(a) and (b) and 24(4)(a) and (b) of the principal Ordinance to clarify that the profit and loss accounts referred to in those sections are the "most recent audited" profit and loss accounts of the companies concerned.

7. Clause 11 amends section 41(2) of the principal Ordinance to provide that a person other than a registered deposit-taking company may apply for the transfer of a deposit-taking licence. The capital requirements of paragraphs (a) and (b) of section 24(3) of the principal Ordinance will, however, still apply to the applicant.

8. Clause 12 amends section 56 of the principal Ordinance to provide, for the avoidance of doubt, that the obligation on an authorized institution incorporated in Hong Kong to produce its books, accounts and other documents for examination by the Commissioner extends to its local branches, overseas branches, overseas representative offices and sub- sidiaries, whether local or overseas.

9. Clause 14 repeals and replaces section 69 of the principal Ordin- ance. The new section 69(1) clarifies that it is only an authorized institution's proposed arrangement or agreement for the sale or disposal of its banking business or business of taking deposits or proposed reconstruction of capital to reduce such capital which requires the prior approval of the Financial Secretary (in the case of a bank or licensed deposit-taking company) or the Commissioner (in the case of a registered deposit-taking company). How- ever, the new section 69(2) requires an authorized institution to notify the Commissioner of every arrangement made or agreement entered into for the sale or disposal of all or any part of its business, and of every reconstruction of capital, as soon as practicable after making that arrangement, entering into that agreement or making that reconstruction, as the case may be.

10. Clause 15 amends section 71 of the principal Ordinance to provide that a chief executive of an authorized institution requires the Commission- er's written consent to become, or to act or continue to act as, such chief executive. The amendment will not affect chief executives appointed prior to the Bill's enactment. In the case of an authorized institution incorporated outside Hong Kong, the amendment will, by virtue of section 74 of the principal Ordinance, only apply to the chief executive in respect of the business in Hong Kong of that institution.

11. Clause 20 amends section 81(2) of the principal Ordinance to alter the matters which constitute an authorized institution's financial exposure for the purposes of section 81(1) of the principal Ordinance.

12. Clause 21(c) amends section 83 of the principal Ordinance by inserting a new subsection (4A). The new subsection provides that the

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