A digest of recent legal and regulatory developments follows.
Lowering entry thresholds of the Hong Kong banking market
The Banking Ordinance (Amendment of Seventh Schedule) Notice took effect in May this year. This instrument revised certain licensing requirements for banks operating in Hong Kong. The amendments were generally aimed at lowering the entry criteria for Hong Kong’s banking sector.
The Hong Kong Monetary Authority ("HKMA") will to some extent equalise the treatment of overseas and local banks by applying to the former a much lower asset size test which previously applied only to local banks. Certain requirements for the upgrading of local deposit-taking companies and restricted licence banks into licensed banks have been relaxed. Certain restrictions on local banking operations receiving subsidies from their parent institutions have also been relaxed.
Easing the reporting burden
In July the HKMA issued proposals to amend the current requirements for regulatory returns to be filed by banking institutions. The amendments aim to reduce the reporting burden of such institutions whilst improving the quality and timeliness of reporting.
The proposals include removing the requirements for certain returns or the nature of the information to be provided therein, reducing the frequency of reporting, combining returns and revising the requirements on presentation. Implementation of the new reporting rules is expected around June 2003.
© Herbert Smith 2002
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