Hong Kong Ordinances

DEPOSIT PROTECTION SCHEME ORDINANCE - SECT 13

Exemption

(1) A bank may apply to the Board for an exemption from section  12 (1).

(2) An application under subsection (1) for an exemption is—

   (a)  to be made in the manner specified by the Board; and

   (b)  to be accompanied by such information and documents as the Board may
        reasonably require for the purpose of deciding whether the exemption
        should be granted.

(3) The Board may, on receipt of an application under subsection

(1) from a bank—

   (a)  exempt the bank from section 12(1); or

   (b)  refuse to so exempt the bank.

(4) The Board shall not exempt a bank from section 12(1) unless it is
satisfied that—

   (a)  the bank is incorporated outside Hong Kong;

   (b)  the deposits taken by the bank at its Hong Kong offices are protected
        by a deposit protection scheme, or other scheme of a similar nature,
        established and maintained in the jurisdiction in which the bank is
        incorporated; and

   (c)  the scope and level of protection available to those deposits under
        that scheme are not in all material respects narrower, and lower, than
        those that would be available to those deposits under the Scheme if
        the bank were not exempted.

(5) If the Board exempts a bank from section 12(1)—

   (a)  it is a condition of the exemption—

        (i)    that the bank shall pay an annual exemption fee of such amount
               as may be specified by the Board from time to time;

        (ii)   that the bank shall forthwith notify the Board of any change of
               circumstances which may affect the exemption and, if so
               required by the Board, supply further information and documents
               to assist the Board in deciding whether the exemption should
               continue to be granted; and

        (iii)  where the bank is exempted from section 12(1) after having been
               a member of the Scheme, that the bank shall, in relation to any
               deposit taken by it before the date specified in the notice
               referred to in subsection (6) as the date on which the
               exemption takes effect— (A) at the written request of the
               depositor made within 3 months after that date; and (B) without
               imposing any fee or penalty on the depositor, repay the
               deposit, and pay the interest accrued thereon, prior to
               maturity; and

   (b)  the Board may impose such other conditions of the exemption as the
        Board considers appropriate.

(6) As soon as practicable after having made a decision on an application
under subsection (1) from a bank, the Board shall give notice in writing to
the bank of its decision and, in the case of a decision to refuse to exempt
the bank from section 12(1) or to impose any condition under subsection
(5)(b), the reasons for its decision.

(7) An exemption from section 12(1) remains in force until it is revoked by
the Board.

(8) The Board may, by notice in writing given to a bank the subject of an
exemption from section 12(1)—

   (a)  impose any further condition of the exemption as the Board considers
        appropriate;

   (b)  vary any condition imposed under paragraph (a) or subsection

(5)(b);

   (c)  revoke any condition imposed under paragraph (a) or subsection

(5)(b); or

   (d)  revoke the exemption if any condition of the exemption has not been or
        is not being complied with, and shall, in the case of a decision to
        impose any further condition, vary any condition or to revoke an
        exemption, state the reasons for its decision in the notice.

(9) Before exercising its power under subsection (3)(b), (5)(b) or

(8)(a), (b) or (d), the Board shall afford the bank an opportunity, within
such period as the Board may specify in writing, being a period reasonable in
all the circumstances, of being heard.

(10) A bank exempted from section 12(1) shall, as soon as practicable after
the relevant time, inform in writing its depositors, or any person who is not
already a depositor of the bank but has informed the bank that he intends to
make a deposit with the bank—

   (a)  that it is not a member of the Scheme;

   (b)  that any deposit, in whole or in part, taken by the bank at any of its
        Hong Kong offices is not protected by the Scheme, but is protected by
        a deposit protection scheme, or other scheme of a similar nature,
        established and maintained in the jurisdiction in which the bank is
        incorporated; and

   (c)  of the following information about the scheme—

        (i)    the name, address, telephone number and website (if any) of the
               organization operating the scheme;

        (ii)   the scope and level of protection available to the deposits
               under the scheme;

        (iii)  the type of deposits protected by the scheme; and

        (iv)   any other information about the scheme, if any, as specified
               for this purpose in the conditions of the exemption.

(11) If a bank contravenes subsection (10), every director and every chief
executive of the bank commits an offence and is liable—

   (a)  on conviction on indictment to a fine of $400000 and to imprisonment
        for 2 years; or

   (b)  on summary conviction to a fine at level 6 and to imprisonment for 6
        months.

(12) In subsection (10), “relevant time” (有關時間)—

   (a)  in relation to the bank’s depositors, means the time when the bank
        receives the notice of decision of the Board given under subsection

(6);

   (b)  in relation to a person who is not already a depositor of the bank but
        has informed the bank that he intends to make a deposit with the bank,
        means the time when the person so informs the bank. “relevant
        time” (有關時間)