ENG-2003 — Page 116

FINANCIAL AND MONETARY AFFAIRS

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day co-operation with the SFC to ensure a consistent supervisory approach in accordance with the new Memorandum of Understanding between the two regulators. An electronic register containing the names and relevant particulars of banks' securities staff is made available for public inspection at the HKMA website.

The HKMA continued to implement the policy initiatives contained in the reform programme announced in 1999. A bill to implement the proposed Deposit Protection Scheme was introduced into the Legislative Council in April 2003, and the council has formed a Bills Committee to consider it. Good progress has also been made in the establishment of a Commercial Credit Reference Agency (CCRA) in Hong Kong. The banking industry has identified a service provider to operate the CCRA and is working with the service provider to finalise the implementation details. It is expected that the proposed CCRA would be up and running in 2004. Meanwhile, the Code of Practice on Consumer Credit Data was revised in June 2003 to allow a wider

range of positive consumer credit data to be shared among AIs and other credit providers. This has helped strengthen the credit management systems of AIs and thus is conducive to the maintenance of the stability of the banking system.

The HKMA continued to enhance its electronic banking (e-banking) and technology risk management supervisory framework. In this connection, the HKMA rolled out an automated control self-assessment process to 40 AIs, and also completed over 20 on-site examinations on e-banking, technology risk management and business continuity planning in 2003. In addition, the HKMA issued a guideline note on general principles for technology risk management and a series of circulars to AIs to help strengthen their information technology control environment.

In 2003, the HKMA noted a spate of fake bank websites and e-mail cases in Hong Kong and overseas. To ensure that members of the public in Hong Kong are adequately protected from these frauds, the HKMA issued a circular in May 2003 to recommend AIs to take certain preventive and detective measures, and also a number of press statements to alert people to these cases. The HKMA, the Hong Kong Police Force and the Hong Kong Association of Banks have also been cooperating since February 2003 to launch a multi-channel consumer education programme (for example, issuance of an educational leaflet, production of various episodes played on television and radio) to promote awareness of e-banking security precautions among the general public.

The HKMA received a number of reports on suspected Automatic Teller Machine (ATM) fraud cases during the second half of 2003. The HKMA has been taking the matter seriously and issued a circular in October 2003 to AIs to set out its expectation on the related precautionary measures that should be undertaken and the way in which customer complaints in this relation should be handled. Als have been actively enhancing their precautionary measures for their ATMs. The HKMA will continue to assess the adequacy of individual AIs' measures, and also to ensure that customers' complaints are being dealt with fairly and fully in a satisfactory manner.

One of the functions of the HKMA is to promote and encourage high standards of conduct and sound and prudent business practices among Als, primarily by way of the Code of Banking Practice. The code is issued by the industry associations and endorsed by the HKMA. It sets out the minimum standards to be followed by AIs in their dealings with personal customers. In 2002, the industry established the Code of Banking Practice Committee, in which the HKMA is represented, to provide guidance on the interpretation of the code and to undertake future review from time to time.