Hong Kong Ordinances

DEPOSIT PROTECTION SCHEME ORDINANCE - SECT 27

Entitlement to compensation: general

Division 2—Entitlement to compensation

(1) Subject to section 31, a person is entitled, in respect of one or more
protected deposits with a failed Scheme member that—

   (a)  the person holds in his own right;

   (b)  a depositor holds as a bare trustee for the person; or

   (c)  a depositor holds in a client account for the person as the
        depositor’s client, to compensation of the specified amount from the
        Fund under section 28 or 29, but the total amount of compensation to
        which the person is so entitled in respect of the deposits concerned
        shall not exceed $100000, regardless of the number or amount of
        deposits.

(2) Subject to section 31, a person is entitled, in respect of one or more
protected deposits with a failed Scheme member that the person holds as a
trustee under one trust, to compensation of the specified amount from the Fund
under section 30, but the total amount of compensation to which the person is
so entitled in respect of the deposits held under that trust shall not exceed
$100000, regardless of the number or amount of deposits.

(3) In subsections (1) and (2), “specified amount” (指明款額), in
relation to compensation to which a person is entitled from the Fund, means
the amount by which the aggregate amount, as at the date of the specified
event, of the protected deposits in respect of which the person is so entitled
exceeds the aggregate amount, as at that date, of the liabilities of the
person to the failed Scheme member in respect of which—

   (a)  in the case of the date of the specified event within the meaning of
        section 22(1)(b)(i), a right of set off exists in the winding up of
        the failed Scheme member;

   (b)  in the case of the date of the specified event within the meaning of
        section 22(1)(b)(ii), a right of set off would have existed in the
        winding up of the failed Scheme member had a winding-up order been
        made in respect of it on that date, plus or minus, as the case may be,
        the interest accrued on the deposits, or the liabilities, calculated
        up to and including the quantification date.

(4) For the purposes of subsection (3)—

   (a)  if any protected deposit or liabilities are not denominated in Hong
        Kong dollars, the deposit or liabilities shall be converted into Hong
        Kong dollars at the midpoint between the selling and buying
        telegraphic transfer rates of exchange quoted by HKAB on the
        quantification date or, where no such rates are quoted, at an exchange
        rate determined by the Board; and

   (b)  in determining the amount of liabilities of the person to the failed
        Scheme member, the same rules shall apply with regard to the valuation
        of annuities and future and contingent liabilities as are in force for
        the time being under the law of bankruptcy with respect to the estates
        of persons adjudged bankrupt, as if the failed Scheme member were a
        person so adjudged. “specified amount” (指明款額)