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MADAFV
CONFIDENTIAL
14 RM 21/✓
04 MAY 1990
FROM:
RM Marsden
Hong Kong Department
DATE:
4 May 1990
Mr Paul HuD
Discussed this morning
-Mr Mande would like to look at these papers
again, incorporating
the Governor's latest advice
PS/Mr Maude
PS JAL
CC:
Mr McLaren
~Browar
14/5
JARDINE FLEMING BANKING LICENCE
Hhre 102/2
Reoul.
AMISDES
A
B
1. At his meeting on 30 April, Mr Maude referred to the recent
exchange of correspondence between Mr Keswick and the Governor about
the granting of a full banking licence for Jardine Fleming.
Mr Maude said that he was not entirely clear on what basis ExCo had
reached their decision to postpone a final decision on Jardine
Fleming's application for a full banking licence and how this
related to the revised three-tier system. Mr Maude asked in
particular why it was necessary for a local applicant to be
"predominantly beneficially owned by Hong Kong interests" in order to qualify for a licence.
2. Mr McLaren has sent a personal telegram to the Governor asking for this information but he has not yet received a reply. In the meantime Mr Maude may wish to see a copy of an ExCo paper of
February 1989 which sets out some of the background. The Hong Kong ownership requirement was originally introduce in 1981 to prevent
foreign banks evading the normal size criterion by forming a
subsidiary in Hong Kong. It is clear from the ExCo paper that in
February 1989 the Commissioner of Banking supported Jardine
Fleming's application and did not consider that the proposed changes
to the three-tier system would fully meet Jardine Fleming's
aspirations. We have not seen the outcome of the recent review of
licencing criteria for locally incorporated applicants referred to in the Governor's letter of 2 April.
CONFIDENTIAL
27
No comments yet.
Private notes are available after approval.