Public consultation on proposed enhancements to Banking Ordinance
The Hong Kong Monetary Authority (HKMA) launched a public consultation
today (5 December) on proposed enhancements to the Banking Ordinance
(Cap. 155).
The Hong Kong banking system is robust, resilient
and well regulated. However, given the rapid developments in the
banking sector and the evolving domestic and international regulatory
and supervisory landscape, it is important that the HKMA reviews and
assesses the policy and legal framework for banking regulation and
supervision in Hong Kong from time to time, so as to enable the
Monetary Authority (MA) to effectively discharge his functions under
the Banking Ordinance, especially in promoting the general stability
and effective working of the banking system.
Against this
backdrop, the HKMA has recently conducted a review of the Banking
Ordinance to: (i) reflect developments in banking industry practices,
and regulatory and supervisory approaches, both globally and
domestically; (ii) address specific issues identified from Hong Kong’s
supervisory experience in the past; and (iii) continue the process of
aligning the system of regulation in Hong Kong with that of other
major financial centres.
The Banking Ordinance review focuses
specifically on six priority areas where amendments and enhancements
to the Banking Ordinance are considered timely and necessary. The aim
is to enable the MA and the Hong Kong banking industry to better meet
risks and challenges in times ahead.
The HKMA has earlier
concluded public consultations on two enhancement proposals, in
relation to: simplification of the three-tier banking system into two-
tier, and information sharing among authorized institutions (AIs) on
customers, accounts and transactions for the purpose of preventing and
detecting financial crime. Relevant consultation conclusions were
published on 5 August 2024 and 30 September 2024, respectively. In
addition, the HKMA is reviewing the MA’s enforcement powers, and an
industry consultation is being conducted.
The public
consultation paper issued today sets out the enhancement proposals in
three other aspects, which are: establishing a statutory regime for
the regulation and supervision of designated locally incorporated
holding companies of locally incorporated AIs; allowing flexibility
for the MA to engage skilled persons for assisting the MA in the
performance of his functions under the Banking Ordinance; and
introducing a number of technical amendments.
This
consultation paper also includes proposed amendments to two other
ordinances which have particular relevance for the banking sector,
namely the Financial Institutions (Resolution) Ordinance (Cap. 628)
and the Hong Kong Association of Banks Ordinance (Cap. 364).
The public consultation commences today and will last until 28
January 2025. The consultation paper is available on the HKMA website.
Interested parties are invited to submit their comments by email to
bo_review_consult@hkma. gov. hk or by post on or before the deadline.
Hong Kong Monetary Authority 5 December 2024