TNAG-2125-FCO40-3032-Banking-situation-in-Hong-Kong-1990 — Page 20

CONFIDENTIAL

FM HONG KONG

TO IMMEDIATE FCO

TELNO 1525

OF 09120OZ MAY 90

CONFIDENTIAL

077150

MDHIAN 9850

PERSONAL FOR PAUL HKD FROM GOVERNOR

MIPT : JARDINE FLEMING AND CO BANKING LICENCE : KESWICK LETTER TO

THE PRIME MINISTER

1. MIPT GIVES, I HOPE, ENOUGH OF THE BACKGROUND. YOU MAY WISH TO RECOMMEND TO NO 10 THAT THE PRIME MINISTER REPLIES ON THE FOLLOWING

LINES:

I) DECISIONS ON BANKING LICENCES ARE A MATTER FOR HONG KONG AND THE

EXECUTIVE COUNCIL.

II) SHE UNDERSTANDS THAT, UNDER THE PUBLISHED CRITERIA FOR A FULL LOCAL BANKING LICENCE, JF AND CO HAVING PARENTS INCORPORATED OUTSIDE HONG KONG, DOES NOT MEET THE REQUIREMENT OF BEING PREDOMINANTLY BENEFICALLY OWNED BY HONG KONG INTERESTS AND THEREFORE HAS TO MEET CERTAIN CRITERIA ABOUT SIZE ETC WHICH IT DOES NOT MEET.

III) SHE UNDERSTANDS ALSO THAT, UNDER A RECENT CHANGE TO THE RULES, IT IS NOW POSSIBLE FOR JF AND CO TO REFER TO ITSELF AS A MERCHANT

BANK UNDER THE ARRANGEMENTS FOR A RESTRICTED LICENCE BANK. SHE HOPES THIS WILL HELP THEM IN THEIR BUSINESS BOTH IN HONG KONG, AND IN THE REGION.

IV) SHE IS PLEASED TO SEE HOW SUCCESSFUL THE JARDINE FLEMING GROUP HAVE BEEN IN DEVELOPING THEIR BUSINESS IN THE REGION SINCE THEY

WERE SET UP 20 YEARS AGO AND IN HELPING TO BUILD UP HONG KONG AS AN INTERNATIONAL FINANCIAL CENTRE.

WILSON

YYYY

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CONFIDENTIAL