Annex G
Criteria for assessing whether a company which has applied for a banking licence as a local applicant
is closely associated and identified with Hong Kong
History
1.
It is important that the applicant company and, where relevant, its parent company have long historical association with Hong Kong. Relevant considerations include the duration of such historical association and the period since the applicant company and its parent established a substantive presence in Hong Kong, and the extent to which they have contributed to the economic development of the territory.
Separate identity and mind and management
2.
The applicant should be widely recognised as an entity in its own right, and have a separate management structure at executive level, It would be relevant, for example, if the applicant company is at the head of a distinct sub-group whose business is centred in Hong Kong and a significant number of its directors and members of senior management are long term Hong Kong residents. Similarly, it
would strengthen the case if the shareholder controller also had its headquarters and mind and management in Hong Kong (even if it is legally incorporated outside Hong Kong).
It
may be acceptable to look to an intermediate (rather than the ultimate) holding company as being the controller for this purpose if the former company is itself an institution of considerable strength whose mind and management is in Hong Kong.
Business operations
3. the
An important factor affecting public perception of identity of the applicant company and, where relevant, the banking group of which it is a part, is whether a significant proportion of their business operations is centred in Hong Kong and whether such operations amount to a substantial presence in the business, in particular the banking, sector. Relevant factors include the funding sources of the applicant company and the group (the extent to which the funding is based on local deposits and the local inter-bank market), the percentage of their exposures which are for use in Hong Kong, the proportion of their assets based in Hong Kong, the market share of their banking activities, and the percentage of their staff located in Hong Kong. It is also important to examine the business plans of the applicant and the group to determine whether this would continue in the future on a long term basis.
Proportion of shareholders which are Hong Kong based
4.
It would strengthen the case if a substantial number of the ultimate shareholders of the holding company of the applicant company are Hong Kong residents or have addresses in Hong Kong.
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