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DRAFT LETTER FROM THE PRIME MINISTER
Thank you for your letter of 1 May about the difficulty being experienced by Jardine Fleming & Co in obtaining a full banking licence in Hong Kong.
As you know, decisions on local banking licences are for the Hong Kong authorities and the Executive Council. But I have looked carefully into the matter.
One of the published criteria for obtaining a full banking licence is that local applicants have to be predominantly beneficially owned by Hong Kong interests. I understand that when the Executive Council last considered Jardine Fleming's application, they considered that this criterion was not clearly met since neither of Jardine Fleming's ultimate parent companies are incorporated in Hong Kong. It would of course be open to Jardine Fleming and Co to apply for a full banking licence in the same way as any other non-Hong Kong institution provided it could meet the size criteria.
I also understand that under the revised licencing structure which came into effect on 1 February 1990 Jardine Fleming & Co has now been designated as a restricted licence bank and can describe itself as a merchant bank. I hope that this will help Jardine Fleming to gain better access to markets both in Hong Kong and elsewhere.
Jardine Fleming's applications for a full banking licence will be considered again once the Hong Kong authorities have seen how the new three tier system operates in practice. In the meantime, I understand that the Hong Kong Government stand ready to help in any case where Jardine Fleming feel that their lack of full banking status is hampering them internationally.
Henry Keswick Esq
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