TNAG-2755-FCO40-3972-Banking-situation-in-Hong-Kong-1993 — Page 75

PRIVY

Cou

CIL

OFFICE

IN CONFIDENCE

PRIVY COUNCIL OFFICE

WHITEHALL, LONDON SWIA 2AT

3

L 8 SEP 1993

Ref: C200(5)

C. Farthing, Esq.,

Banking and Mutuals Division,

HM Treasury,

Parliament Street,

London, SW1P 3AG.

HKB. 102/3 SEP 1993

WA 619.

Tel No 071-270-0488

2nd September 1993

Jack Cope Miss Brooks Cepal Advisers

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we have no agents.

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its MED on 1319 Qu-aho contried to fir Bulling thank We have been approached by the Legal Adviser of HSBC Holdings, Plc. whose group includes the wholly owned subsidiary of the British Bank of the Middle East (BBME).

The BBME was incorporated by Royal Charter in 1889 and, somewhat unusually, the Charter was granted for a fixed term. As subsequently extended, the incorporation will now expire on 30th January 1999. The Charter was most recently amended in 1980 when, apparently with the consent of Treasury, the Head Office of the BBME was relocated from London to Hong Kong. For regulatory and tax reasons it is now desired to relocate the Head Office of BBME from Hong Kong to Jersey, in accordance with a Bank of England recommendation.

The Legal Adviser has sought our advice concerning, first, the possibility of seeking an extension to the Charter, and secondly the possibility of re-incorporating the Bank in Jersey, purportedly by the grant of a Supplemental Charter by The Queen as Duke of Normandy.

The Legal Adviser called to discuss these matters with the Clerk of the Council on 12th August. We conceded that the limitation as to time on the Charter was an unusual feature. It is to be noted that the Chartered Bank, also incorporated in the last century, was issued with a Supplemental Charter in 1956 converting the document into a grant in perpetuity. We undertook to take appropriate soundings as to whether the Privy Council would be likely to object to a similar provision for the BBME.

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