Hong Kong Ordinances

DEPOSIT PROTECTION SCHEME ORDINANCE - SECT 33

Board’s powers in relation to arrangements designed to increase amount of compensation

(1) Subsection (2) applies if—

   (a)  an arrangement has been entered into or carried out on or after the
        relevant date in relation to a protected deposit with a Scheme member
        except where the arrangement is one in pursuance of a legally
        enforceable obligation incurred prior to that date;

   (b)  the arrangement has, or would have had but for this section, the
        effect of enabling a person to become entitled to an amount of
        compensation under Division 2, to which the person would otherwise not
        be entitled; and

   (c)  it would be concluded, having regard to—

        (i)    the manner in which, and the circumstances under which, the
               arrangement was entered into or carried out;

        (ii)   the form and substance of the arrangement; and

        (iii)  the result in relation to the operation of this Ordinance that,
               but for this section, would have been achieved by the
               arrangement, that the arrangement was entered into or carried
               out for the sole or dominant purpose of enabling the person,
               either alone or in conjunction with other persons, to become
               entitled to an amount of compensation under Division 2, to
               which the person would otherwise not be entitled.

(2) The Board shall exercise its power under section 32(5)—

   (a)  as if the arrangement or any part thereof had not been entered into or
        carried out; or

   (b)  in such other manner as the Board considers appropriate to counteract
        the effect of the arrangement.

(3) In this section— “arrangement” (安排) includes an arrangement,
transaction, operation or scheme whether or not such arrangement, transaction,
operation or scheme is enforceable, or intended to be enforceable, by legal
proceedings; “relevant date” (有關日期), in relation to a Scheme
member, means—

   (a)  the date on which a Manager within the meaning of section 2(1) of the
        Banking Ordinance ( Cap 155) is appointed in respect of the Scheme
        member under section 52 of that Ordinance; or

   (b)  the date on which the petition for the winding up of the Scheme member
        is presented, whichever is the earlier. “arrangement” (安排)
        “relevant date” (有關日期)