HONG KONG BANKING ORDINANCE Arrangement Of Sections Part I . - Free Download PDF

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HONG KONG BANKING ORDINANCE(as amended)Arrangement of SectionsPart I - Preliminary1.2.3.Short titleInterpretationApplicationPart II - Appointments, Functions Of Monetary Authority,Reports By Monetary Authority And Power OfGovernor To Give Directions4.5.6.7.8.9.10.Banking Advisory CommitteeDeposit-taking Companies Advisory Committee(Repealed)Functions of Monetary Authority(Repealed)Reports by Monetary AuthorityPower of Governor to give directionsPart III - Banking Business And Business Of Taking DepositsTo Be Carried On By Authorized Institutions Only11.12.13.14.Banking business restricted to licensed banksRestriction on business of taking depositsPower to grant exemptionsDeposit-taking company not to take deposits less than specified sumPart IV- Authorization15.16.17.18.19.Application for authorizationGrant or refusal of authorization, etc.Application for authorization in the case of proposed companyVariation of authorizationFees payable by authorized institutionshttp://www.ukincorp.co.uk - UK Company Formation Agent 1

20.21.Register of authorized institutions, etc.Publication of names entered in or removed from register and suspensionsPart V - Revocation Of Authorization22.23.Revocation of authorizationProcedure on and effect of revocation of authorizationPart VI - Suspension Of Authorization24.25.26.27.Temporary suspensionsSuspensionsOpportunity of being heardEffect of suspensionPart VII - Transfer Of Authorization28. Transfer of authorization29. Application for transfer30. Certificate of transfer, etc.31. Liabilities and privileges of transferer and transferee32-43.(Repealed)Part VIII - Local Branches, Local Representative Offices And Fees44.45.46.47.48.Control of establishment, etc. of local branchesFees in respect of local branchesControl of establishment, etc. of local representative officesSupply of information and examination of local representative officesFees in respect of local representative officesPART IX - Overseas Branches, Overseas Representative Offices,Fees and Overseas Banking Corporations.49.Control of establishment, etc. of overseas branches and overseasrepresentative offices50. Conditions regarding overseas branches and overseas representative offices51. Fees in respect of overseas branches and overseas representative offices51A. Control of establishment, etc. of overseas banking corporationshttp://www.ukincorp.co.uk - UK Company Formation Agent 2

Part X - Powers Of Control Over Authorized Institutions52. Powers of Monetary Authority53. Powers of Governor in Council53A. Notification of direction under section 52(1)(B) or (C), etc.53B. Effect of direction under section 52(1)(C)53C. Powers of Manager53D. High Court may approve certain resolutions53E. High Court may make certain orders53F. Duration of direction under section 52(1)(B) or (C)53G. Advisors, Managers and assistants53H. Obstruction, etc. of Manager54. (Repealed)55. Examination and investigation of authorized institutions, etc.56. Production of authorized institution's books, etc.57-58.(Repealed)Part XI - Audits And Meetings59.59A.60.61.62.AuditNotification in respect of auditorsPublication of audited balance sheet, etc.Communication by auditor with Monetary Authority(Repealed)Part XII - Disclosure of Information by Authorized Institutions63.64.65.66.67.68.Returns and information to be submitted to the Monetary AuthorityInformation on shareholding, etc.Alteration in constitutionAuthorized institution to notify Monetary Authority when it ceases to takedepositsDuty to report inability to meet obligationsExamination by authorities outside Hong KongPart XIII - Ownership and Management of Authorized Institutions.69.Amalgamation, etc. requires approvalhttp://www.ukincorp.co.uk - UK Company Formation Agent 3

70.70A.70B.70C.70D.71.72.72A.73.74.Provisions applicable to persons proposing to become controllers ofauthorized institutions incorporated in Hong KongObjection to existing controllersRestrictions on and sale of sharesProhibition on certain persons acting as indirect controllersPunishment for attempted evasion of restrictionsChief executives and directors require Monetary Authority's approval(Repealed)Monetary Authority may require specified persons to submit informationCertain persons prohibited from acting as employees of authorizedinstitutions except with consent of Monetary AuthorityAppointment of chief executivePart XIV75-78. (Repealed)Part XV - Limitations on Loans by and Interestsof Authorized Institutions79. Interpretation and application79A. Monetary Authority may require provisions of this Part to apply to certainauthorized institutions on a consolidated basis80. Advance against security of own shares, etc.81. Limitations on advances by authorized institutions82. Monetary Authority may publish guidelines on business practices ofauthorized institutions83. Limitations on advances to directors, etc. of bank84. (Repealed)85. Limitation on advances to employees86. Powers of Monetary Authority where moneys placed with foreign bank87. Limitation on shareholding by authorized institutions88. Limitation on holding of interest in land by authorized institutions89. (Repealed)90. Limitation on aggregate holdings under sections 83, 87 and 8891. Proof of compliance with section 80, 81, 83, 85, 86, 87, 88 or 90Part XVI - Advertisements, Representationsand Use of Title “Bank”http://www.ukincorp.co.uk - UK Company Formation Agent 4

92.93.94.95.96.97.97A.Offence to issue advertisements and documents relating to depositsFraudulent inducement to make a depositLiability in tort for inducing persons to make a deposit in certain casesFalse, etc. advertisements by authorized institutionCertain representations prohibitedRestrictions on use of name “bank”False statements as to authorized statusPart XVII - Capital Adequacy Ratio of Authorized Institutions98.99.100.101.Capital adequacy ratioFailure to keep to capital adequacy ratioRemedial actionMonetary Authority may increase capital adequacy ratio for particularauthorized institutionsPart XVIII - Liquidity Ratio of Authorized Institutionsand Matters Affecting Liquidity Ratio102.103.104.105.Liquidity ratioFailure to keep to liquidity ratioRemedial actionMonetary Authority may vary liquidity ratio for particular authorizedinstitutions106. Authorized institutions not to create certain charges and to notify MonetaryAuthority of certain civil proceedingsPart XIX107-116.(Repealed)PART XX - Investigations of Authorized Institutions117. Investigations on behalf of Financial Secretary118. Powers of the inspector and offences in connection with the investigationPart XXI - Miscellaneoushttp://www.ukincorp.co.uk - UK Company Formation Agent 5

119. Governor in Council to decide whether or not banking business or businessof taking deposits is being conducted120. Official secrecy121. Disclosure of information relating to authorized institutions122. Winding-up of authorized institutions123. Offences by directors, managers, trustees, employees and agents124. Prohibition on receipt of commission by staff125. Search warrants and seizures126. Defence where director or manager, etc. prosecuted126A. Limit of time for complaint or information127. Indemnity128. (Repealed)129. Validity of contract in contravention of this Ordinance or any OrdinanceRepealed by this Ordinance130. (Repealed)131. Recovery of fees, expenses, etc.131A. Cost related fees to be paid into Exchange Fund132. Use of language133. Power of Monetary Authority to specify forms134. Service of notices134A. Monetary Authority to consult, etc., before attaching conditions toauthorization135. Power to amend Schedules136. Consent of Attorney General137. (Amendments Incorporated)137A. Exclusion of provisions of Gambling Ordinance137B. Prescribed instrumentsPart XXII - Transitional, Savings and Repeal138.139.140.141.InterpretationAppointed members of former committees to continue in office(Repealed)Authorized and employed persons to continue to be authorized andemployed142. Former applications for licences, etc. deemed to be applications under thisOrdinance143. Former licences, etc. deemed to be licences, etc. under this Ordinance144. Date of payment of certain feeshttp://www.ukincorp.co.uk - UK Company Formation Agent 6

145. Conditions attached to former licences, etc. deemed to be conditions underthis Ordinance146. Suspension of former registration, etc. deemed to be suspension under thisOrdinance147. Actions, etc. under Part IV of former Banking Ordinance deemed to beactions under Part X of this Ordinance148. Transitional provision in relation to certain letters of comfort148A. Transitional provisions in relation to section 87149. Transitional provisions in relation to amendments made by Banking(Amendment) Ordinance 1990150. Transitional provisions in relation to amendments made by Banking(Amendment) (No. 2) Ordinance 1991151. Savings in relation to Exchange Fund (Amendment) Ordinance 1992152. Transitional provisions in relation to Banking (Amendment) Ordinance1995First ScheduleSecond ScheduleThird ScheduleFourth ScheduleFifth ScheduleSixth ScheduleSeventh ScheduleEighth ScheduleNinth ScheduleTenth ScheduleSpecified period and specified sumsFeesCapital Adequacy RatioLiquidity RatioRequirements applicable to prescribed advertisementsSpecified instrumentsMinimum criteria for authorizationGrounds for revocation of authorizationPowers of Manager of authorized institutionNotice relating to authorized institution's audited annualaccountshttp://www.ukincorp.co.uk - UK Company Formation Agent 7

BANKINGTo regulate banking business and the business of taking deposits and to makeprovision for the supervision of authorized institutions so as to provide a measureof protection to depositors and to promote the general stability and effectiveworking of the banking system, and to provide for matters incidental thereto orconnected therewith.PART I - PreliminaryShort title1.(1) This Ordinance may be cited as the Banking Ordinance.(2)(Omitted as spent)Interpretation2.(1) In this Ordinance, unless the context otherwise requires-“accounts” means any accounts, whether kept in writing or print or by anymachine or device;“advertisement” means any form of advertising, whether notified orpublishedhttp://www.ukincorp.co.uk - UK Company Formation Agent 8

(a)in a newspaper, magazine, journal or other periodicalpublication;(b)by the display of posters or notices;(c)by means of circulars, brochures, pamphlets or handbills;(d)by an exhibition of photographs or cinematograph films; or(e) by way of sound broadcasting or television,and references to the issue of an advertisement shall be construed accordingly;“Advisor”, in relation to an authorized institution, means the personappointed, pursuant to section 52(1)(B), to be the Advisor of the institution;“approved currency” means a currency-(a)freely convertible into Hong Kong dollars; or(b)approved by the Monetary Authority;“associate”, in relation to a person entitled to exercise, or control the exerciseof, voting power in relation to, or holding shares in, a company, means anyother person in respect of whom that first-mentioned person has anhttp://www.ukincorp.co.uk - UK Company Formation Agent 9

agreement or arrangement, whether oral or in writing, express or implied,with respect to the acquisition, holding or disposal of shares or otherinterests in that company or under which they act together in exercising theirvoting power in relation to it;“auditor” means a professional accountant holding a practising certificateunder the Professional Accountants Ordinance (Cap. 50);“authorization” means, as the case requires-(a)the authorization under section 16 of a company to carry onbanking business, a business of taking deposits as adeposit-taking company or a business of taking deposits as arestricted licence bank, as the case may be;(b)the banking licence, registration or restricted banking licence, asthe case may be, held by an authorized institution;“authorized institution” means-(a)a bank;(b)a restricted licence bank; orhttp://www.ukincorp.co.uk - UK Company Formation Agent 10

(c)a deposit-taking company;“authorized institution incorporated in Hong Kong” means an authorizedinstitution incorporated in Hong Kong by or under the CompaniesOrdinance (Cap. 32) or any other Ordinance and any reference to a bankincorporated in Hong Kong, a deposit-taking company incorporated in HongKong or a restricted licence bank incorporated in Hong Kong shall beconstrued accordingly;“authorized institution incorporated outside Hong Kong” means anauthorized institution incorporated by or under the law or other authority inany place outside Hong Kong;“automated teller machine” means a terminal device, whether installed by abank or by some other person, which is linked directly or indirectly to acomputer system used by a bank and which provides facilities to customersof the bank;“bank” means a company which holds a valid banking licence;“Banking Advisory Committee” means the Banking Advisory Committeeestablished by section 4;http://www.ukincorp.co.uk - UK Company Formation Agent 11

“banking business” means the business of either or both of the following-(a)receiving from the general public money on current, deposit,savings or other similar account repayable on demand or withinless than 3 months or at call or notice of less than 3 months;(b)paying or collecting cheques drawn by or paid in by customers;“banking licence” means a banking licence granted under section 16;“capital adequacy ratio” means the capital adequacy ratio referred to insection 98;“chief executive”, in relation to an authorized institution, means the chiefexecutive appointed under section 74 in respect of the institution, andincludes an alternate chief executive so appointed;“company” means a body corporate-(a)incorporated under the Companies Ordinance (Cap. 32);(b)incorporated by any other Ordinance; or(c)incorporated outside Hong Kong;http://www.ukincorp.co.uk - UK Company Formation Agent 12

“controller”, in relation to a company-(a)means, in respect of all the provisions of this Ordinance, anyperson who is-(b)(i)an indirect controller; or(ii)a majority shareholder controller; andincludes, in respect of the provisions of Part XIII, any personwho is a minority shareholder controller,of that company, and references in this Ordinance to “control” shall beconstrued accordingly;“currency” includes-(a)the European Currency Unit; and(b)any medium of exchange the subject of a declaration undersubsection (5)(a) which is in force;“deposit” -(a)means a loan of moneyhttp://www.ukincorp.co.uk - UK Company Formation Agent 13

(i)at interest, at no interest or at negative interest; or(ii)repayable at a premium or repayable with anyconsideration in money or money's worth; but(b)does not include a loan of money-(i)upon terms involving the issue, by any company, ofdebentures or other securities in respect of which aprospectus has been registered under the CompaniesOrdinance(Cap.32);(ii)upon terms referable to the provision of property orservices; or(iii)by one company to another (neither company being anauthorized institution) at a time when one is a subsidiaryof the other or both are subsidiaries of another company,and references in this Ordinance to the taking or themaking of a deposit shall be construed accordingly;“depositor” means a person entitled to repayment of a deposit, whetherhttp://www.ukincorp.co.uk - UK Company Formation Agent 14

made by him or not;“Deposit-taking Companies Advisory Committee” means the Deposittaking Companies Advisory Committee established by section 5;“deposit-taking company” means a company which is currently registered;“director” includes any person who occupies the position of director,whatever the title of his office;“document” includes a circular, brochure, pamphlet, poster, handbill,prospectus and any other document which is directed at or likely to be readby members of the public; and also includes any newspaper, magazine,journal or other periodical publication;“Exchange Fund” means the Exchange Fund established under theExchange Fund Ordinance (Cap.66);“exercise”, in relation to a function, includes perform and discharge;“former auditor” means a person who was formerly the auditor of anauthorized institution or a former authorized institution;“former authorized institution” means an institution which was formerly ahttp://www.ukincorp.co.uk - UK Company Formation Agent 15

bank, a restricted licence bank or a deposit-taking company;“functions” includes powers and duties;“holding company” and “subsidiary” have the same meaning as in theCompanies Ordinance (Cap. 32);“incorporated outside Hong Kong” includes established, by whatevermeans, outside Hong Kong;“indirect controller”, in relation to a company, means any person inaccordance with whose directions or instructions the directors of thecompany or of another company of which it is a subsidiary are accustomedto act, but does not include a Manager or Advisor, or any person inaccordance with whose directions or instructions those directors areaccustomed to act by reason only that they act on advice given by him in hisprofessional capacity;“issue”, in relation to an advertisement, invitation or document, includespublish, circulate, distribute or disseminate the advertisement, invitation ordocument; and also includes causing the advertisement, invitation ordocument to be issued;http://www.ukincorp.co.uk - UK Company Formation Agent 16

“liquidity ratio” means the liquidity ratio referred to in section 102;“local branch”, in relation to-(a)an authorized institution which is a bank, means-(i)in the case of a bank incorporated in Hong Kong, a placeof business thereof in Hong Kong, other than itsprincipal place of business in Hong Kong, at which itcarries on banking business; and(ii)in the case of a bank incorporated outside Hong Kong, aplace of business thereof in Hong Kong, other than itsprincipal place of business in Hong Kong, at which itcarries on banking business,but in either case does not mean an automated teller machine;and(b)an authorized institution which is a deposit-taking company or arestricted licence bank, means a place of business in HongKong of a deposit-taking company or a restricted licence bank,other than its principal place of business in Hong Kong, atwhich it carries on the business of taking deposits;http://www.ukincorp.co.uk - UK Company Formation Agent 17

“local representative office” means an office in Hong Kong of a bank withinthe meaning of section 46(9);“majority shareholder controller”, in relation to a company, means anyperson who, either alone or with any associate or associates, is entitled toexercise, or control the exercise of, more than 50% of the voting power atany general meeting of the company or of another company of which it is asubsidiary;“Manager”, in relation to an authorized institution, means the personappointed, pursuant to section 52(1)(C), to be the Manager of the institution;“manager”, in relation to an authorized institution, means its chief executiveand any other person employed by the institution who, under the immediateauthority of a director or of the chief executive, exercises managerialfunctions or is responsible for maintaining accounts or other records of theinstitution;“minority shareholder controller”, in relation to a company, means anyperson who, either alone or with any associate or associates, is entitled toexercise, or control the exercise of, 10% or more, but not more than 50%, ofhttp://www.ukincorp.co.uk - UK Company Formation Agent 18

the voting power at any general meeting of the company or of anothercompany of which it is a subsidiary;“Monetary Authority” means the Monetary Authority appointed undersection 5A of the Exchange Fund Ordinance (Cap.66);“money at call” means money payable within not more than 24 hours of ademand therefor, but does not include money payable on demand;“overs

institution incorporated in Hong Kong by or under the Companies Ordinance (Cap. 32) or any other Ordinance and any reference to a bank incorporated in Hong Kong, a deposit-taking company incorporated in Hong Kong or a restricted licence bank incorporated in Hong Kong shall be construed accordingly; “authorized institution incorporated outside ...