C
CONFIDENTIAL
FM FCO
TO IMMEDIATE HONG KONG
TELNO 879
OF 01100OZ MAY 90
CONFIDENTIAL
PERSONAL FOR GOVERNOR FROM MCLAREN
JARDINE FLEMING BANKING LICENCE
(2
051354
MDHOAN 7934
Akc load
нас
REC
-9 MAT TUSn
DESK OFFIC
INDEX
1. MR MAUDE HAS SEEN A COPY OF YOUR RECENT EXCHANGE OF CORRESPONDENCE WITH HENRY KESWICK ON THIS SUBJECT (YOUR LETTER OF
2 APRIL). HE IS NOT ENTIRELY CLEAR ON WHAT BASIS EXCO REACHED THEIR DECISION TO POSTPONE A FINAL DECISION ON JARDINE FLEMING'S APPLICATION FOR A FULL BANKING LICENCE AND HOW THIS RELATES TO THE REVISED THREE-TIER SYSTEM. MR MAUDE HAS ASKED IN PARTICULAR
WHY IT IS NECESSARY FOR A LOCAL APPLICANT TO BE QUOTE PREDOMINANTLY BENEFICIALLY OWNED BY HONG KONG INTERESTS UNQUOTE
IN ORDER TO QUALIFY FOR A LICENCE.
2.
I HAVE NOT SEEN THE OUTCOME OF THE REVIEW OF LICENSING
CRITERIA FOR LOCALLY INCORPORATED APPLICANTS REFERRED TO IN YOUR
LETTER. BUT I RECALL FROM AN EXCO PAPER OF FEBRUARY 1989 THAT
THE HONG KONG OWNERSHIP REQUIREMENT WAS ORIGINALLY INTRODUCED IN
1981 TO PREVENT FOREIGN BANKS EVADING THE NORMAL SIZE CRITERION
BY FORMING A SUBSIDIARY IN HONG KONG. I ALSO RECALL THAT 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.
J
3 IN HIS LETTER TO YOU OF 22 MARCH, HENRY KESWICK IMPLIES THAT JARDINE FLEMING ARE BEING DENIED A LICENCE BECAUSE OF LOBBYING BY
OTHER INTERESTED PARTIES AND THAT THE POSTPONEMENT OF A DECISION
ON THEIR APPLICATION IS SIMPLY A DEFENCE OF THE STATUS QUO.
I AM SURE THAT THIS IS NOT THE CASE. BUT IT
WOULD BE HELPFUL IF YOU COULD EXPLAIN THE BACKGROUND TO EXCO'S
POSITION IN A WAY WHICH WOULD ENABLE US TO DEMONSTRATE
CONCLUSIVELY TO MR MAUDE THAT JARDINE FLEMMING HAVE NO REASONABLE
CAUSE FOR COMPLAINT.
HURD
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