Hong Kong Ordinances

DEPOSIT PROTECTION SCHEME ORDINANCE - SECT 22

Occurrence of specified event

PART 5

COMPENSATION

Division 1—Preliminary

(1) In this Part—

   (a)  subject to section 24, a specified event has occurred in relation to a
        Scheme member if—

        (i)    a winding-up order has been made by the Court of First Instance
               in respect of the Scheme member; or

        (ii)   the Monetary Authority has served on the Board a notice of his
               decision in respect of the Scheme member under subsection (2),
               whichever is the earlier;

   (b)  a reference to a date of the specified event, in relation to a Scheme
        member, means—

        (i)    if a specified event has occurred in relation to the Scheme
               member by virtue of paragraph (a)(i), the date on which the
               winding-up order in respect of the Scheme member is made;

        (ii)   if a specified event has occurred in relation to the Scheme
               member by virtue of paragraph (a)(ii), the date on which the
               notice is served on the Board under subsection (2).

(2) If—

   (a)  in respect of a Scheme member—

        (i)    a Manager within the meaning of section 2(1) of the Banking 
               Ordinance ( Cap 155) has been appointed under section 52 of
               that Ordinance; or

        (ii)   a provisional liquidator has been appointed; and

   (b)  the Monetary Authority is of the opinion that the Scheme member—

        (i)    is likely to become unable to meet its obligations;

        (ii)   is about to suspend payment to its depositors; or

        (iii)  is insolvent, has ceased to pay its debts in the ordinary
               course of business, or cannot pay its debts as they become due,
               the Monetary Authority may, after consultation with the
               Financial Secretary, decide that compensation should be paid
               from the Fund to the depositors of the Scheme member in
               accordance with this Ordinance and shall thereupon serve on the
               Board a written notice of the Monetary Authority’s decision.

(3) In the absence of evidence to the contrary, the Monetary Authority is
deemed to have served on the Board a notice under subsection

(2) if the notice has been left at the Board’s address in Hong Kong.

(4) The Monetary Authority shall publish in the Gazette a copy of any notice
served on the Board under subsection (2).

(5) If a specified event has occurred in relation to a Scheme member, the
Board may exempt in writing the Scheme member, in whole or in part as
specified in the exemption, from section 15 and from rules made under
section 51.

(6) If a specified event has occurred in relation to a Scheme member by virtue
of subsection (1)(a)(ii), the fact that—

   (a)  in the case where subsection (2)(a)(i) applies in relation to the
        occurrence, the appointment of the Manager is reversed by the Chief
        Executive in Council under section 53(1)(i) of the Banking Ordinance (
        Cap  155) or is set aside by a court; or

   (b)  in the case where subsection (2)(a)(ii) applies in relation to the
        occurrence, the order appointing the provisional liquidator is
        discharged, does not affect the operation of subsection (1)(a)(ii) in
        relation to the Scheme member.