Hong Kong Ordinances

DEPOSIT PROTECTION SCHEME ORDINANCE - SCHEDULE 4

[sections 2, 15 & 54]

1.	Interpretation

(1)	In this Schedule, unless the context otherwise requires—
"amount of relevant deposits" (有關存款款額), in relation to a Scheme member, 
does not, subject to subsection (2), include—
(a)	where—
(i)	the amount of one or more relevant deposits held by one person, 
as a depositor, with the Scheme member in his own right exceeds $100000;
(ii)	the amount of one or more relevant deposits held by a 
depositor with the Scheme member as a bare trustee under one bare trust 
exceeds $100000;
(iii)	the amount of the relevant deposit held by a depositor with 
the Scheme member in one client account exceeds $100000; or
(iv)	the amount of one or more relevant deposits held by a 
depositor with the Scheme member as a trustee under one trust exceeds 
$100000,
the amount in excess of $100000; or
(b)	any amount of interest accrued on relevant deposits;
"build-up levy" (建立期徵費) means the build-up levy payable by a Scheme member 
under section 3(4);
"expected loss levy" (預期損失徵費) means the expected loss levy payable by a 
Scheme member under section 4(2);
"specified date" (指明日期), in relation to a year, means—
(a)	20 October of that year; or
(b)	where 20 October of that year is a public holiday, the day (not 
being a public holiday) immediately preceding that date;  (Added L.N. 107 
of 2006. Amended L.N. 175 of 2006)
"start-up year" (啟動年) means the year in which this Schedule commences;  
(Added L.N. 107 of 2006)
"surcharge" (附加費) means the surcharge payable by a Scheme member under 
section 5(2);
"target fund size" (基金目標金額), in relation to a year, means the size of the 
Fund that the Board seeks to achieve and maintain for that year.
(2)	In the definition of "amount of relevant deposits"—
(a)	a reference to a relevant deposit includes a portion of the 
deposit;
(b)	for the purposes of paragraph (a)(i) of that definition, if a 
depositor consists of 2 or more persons—
(i)	subject to subparagraph (ii), each of the persons is deemed to 
have an equal share in the deposit unless the contrary is proved to the 
satisfaction of the Board;
(ii)	in the case where the persons carry on business in 
partnership, those persons are a single and continuing body of persons as 
distinct from the persons who may from time to time be the members of the 
partnership; and
(c)	for the purposes of paragraph (a)(ii) and (iv) of that 
definition, if the depositor consists of 2 or more persons, those persons 
are a single and continuing body of persons as distinct from the persons 
who may from time to time be the bare trustees or trustees.
(3)	For the purposes of this Schedule, the target fund size is 
reached in a particular year if the sum of—
(a)	the aggregate amount of contributions payable by all Scheme 
members for that particular year; and
(b)	the balance of the Fund as at the specified date of the 
immediately preceding year,  (Amended L.N. 107 of 2006)
is equal to or greater than the target fund size for that particular year. 

2.	Calculation of target fund size and balance of Fund

(1)	For the purposes of this Schedule, the target fund size for any 
particular year is the specified percentage of the aggregate of the amount 
of relevant deposits maintained with each of the Scheme members as at the 
specified date of the immediately preceding year.  (Amended L.N. 107 of 
2006)
(2)	For the purposes of this Schedule, the balance of the Fund as 
at the specified date of any year is the amount by which the total assets 
of the Fund exceed its total liabilities as shown in a balance sheet of 
the Fund, as at that date, prepared by the Board.  (Amended L.N. 107 of 
2006)
(3)	In this section, "specified percentage" (指明百分比) means 0.3%.

3.	Build-up levy

(1)	This section applies to any year up to and including the year 
in which the target fund size has been reached for the first time after 
the commencement of this Schedule.
(2)	If, after the year in which the target fund size has been 
reached for the first time after the commencement of this Schedule, the 
target fund size for a particular year becomes, as a result of a specified 
amendment, greater than the balance of the Fund as at the specified date 
of the immediately preceding year, this section also applies to—  (Amended 
L.N. 107 of 2006)
(a)	that particular year; and
(b)	any subsequent year up to and including the year in which the 
target fund size is reached for the first time after the commencement of 
that specified amendment.
(3)	If, after the year in which the target fund size has been 
reached for the first time after the commencement of a specified 
amendment, the target fund size for a particular year becomes, as a result 
of another specified amendment, greater than the balance of the Fund as at 
the specified date of the immediately preceding year, this section also 
applies to—  (Amended L.N. 107 of 2006)
(a)	that particular year; and
(b)	any subsequent year up to and including the year in which the 
target fund size is reached for the first time after the commencement of 
that other specified amendment.
(4)	A build-up levy is payable by a Scheme member for any year to 
which this section applies.
(5)	Subject to subsections (6) and (7) and section 6, the amount of 
build-up levy payable by a Scheme member for any year (other than the 
start-up year) is the sum calculated by multiplying the amount of relevant 
deposits maintained with the Scheme member as at the specified date of the 
immediately preceding year by the percentage specified in column 2 of the 
following Table opposite the MA supervisory rating of the Scheme member 
specified in column 1 of that Table.  (Amended L.N. 107 of 2006)

	TABLE
	
Column 1	Column 2
MA supervisory rating	Percentage
1	0.05%
2	0.08%
3	0.11%
4 or 5	0.14%

(5A) Subject to section 6, the amount of build-up levy payable by a Scheme 
member for the start-up year is such portion of the amount of build-up 
levy that would have been payable by the Scheme member for the start-up 
year if that Scheme member had been a member of the Scheme during the 
whole of the year that the number of days during which this Schedule is in 
operation in the start-up year bears to 365.  (Added L.N. 107 of 2006)
(5B) That amount of build-up levy that would have been payable for the 
start-up year is the sum calculated by multiplying the amount of relevant 
deposits maintained with the Scheme member as at—
(a) if the Scheme member becomes a member of the Scheme on or before the 
specified date in the year immediately preceding the start-up year, that 
specified date; or
(b) if the Scheme member becomes a member of the Scheme after that 
specified date, the date on which it becomes a member of the Scheme,
by the percentage specified in column 2 of the Table set out in subsection 
(5) opposite the MA supervisory rating of the Scheme member specified in 
column 1 of that Table.  (Added L.N. 107 of 2006)
(6) If the amount by which the target fund size for a particular year 
exceeds the balance of the Fund as at the specified date of the 
immediately preceding year is smaller than the aggregate amount of 
build-up levies that would, but for this subsection, have been payable by 
all Scheme members for that particular year in accordance with subsection 
(5), the amount of build-up levy payable by a Scheme member for that 
particular year is such portion of the amount of build-up levy that would 
have been payable by the Scheme member for that year in accordance with 
subsection (5) that such amount of excess bears to such aggregate amount.  
(Amended L.N. 107 of 2006)
(7) If the target fund size for a particular year does not exceed the 
balance of the Fund as at the specified date of the immediately preceding 
year, no build-up levy is payable for that particular year.  (Amended L.N. 
107 of 2006)
(8) For the avoidance of doubt, the percentage specified in column 2 of 
the Table in subsection (5) may be revised by way of an amendment to this 
section before, during or after the year in which the target fund size is 
reached for the first time after the commencement of this Schedule.
(9) In this section, "specified amendment" (指明的修訂) means an amendment to 
the definition of "specified percentage" in section 2(3).

4. Expected loss levy

(1) This section applies to any year after the year in which the target 
fund size has been reached for the first time after the commencement of 
this Schedule, except a year to which section 3 applies by virtue of 
subsection (2) or (3) of that section.
(2) An expected loss levy is payable by a Scheme member for any year to 
which this section applies.
(3) Subject to section 6, the amount of expected loss levy payable by a 
Scheme member for any year is the sum calculated by multiplying the amount 
of relevant deposits maintained with the Scheme member as at the specified 
date of the immediately preceding year by the percentage specified in 
column 2 of the following Table opposite the MA supervisory rating of the 
Scheme member specified in column 1 of that Table.  (Amended L.N. 107 of 
2006)

	TABLE
	
Column 1	Column 2
MA supervisory rating	Percentage
1	0.0075%
2	0.01%
3	0.015%
4 or 5	0.02%

(4) For the avoidance of doubt, the percentage specified in column 2 of 
the Table in subsection (3) may be revised by way of an amendment to this 
section before, during or after the year in which the target fund size is 
reached for the first time after the commencement of this Schedule.

5. Surcharge

(1) This section applies to any year—
(a) to which section 4 applies; and
(b) 70% of the target fund size for which is greater than the balance of 
the Fund as at the specified date of the immediately preceding year.  
(Amended L.N. 107 of 2006)
(2) A surcharge is payable by a Scheme member for any year to which this 

section applies.
(3) Subject to section 6, the amount of surcharge payable by a Scheme 
member for any year is a specified portion of the amount of build-up levy 
that would have been payable by the Scheme member for that year in 
accordance with section 3(5) as if section 3 applied to that year.
(4) The aggregate amount of surcharges payable by all Scheme members for 
any year is—
(a) the difference between—
(i) the aggregate amount of build-up levies that would have been payable 
by all Scheme members for that year in accordance with section 3(5) as if 
section 3 applied to that year; and
(ii) the aggregate amount of expected loss levies payable by all Scheme 
members for that year in accordance with section 4(3); or
(b) 30% of the amount by which the target fund size for that year exceeds 
the balance of the Fund as at the specified date of the immediately 
preceding year,  (Amended L.N. 107 of 2006)
whichever is the lower.
(5) In this section, "specified portion" (指明部分), in relation to the amount 
of build-up levy that would have been payable for a year, means the 
portion that the aggregate amount of surcharges payable by all Scheme 
members for that year, calculated in accordance with subsection (4), bears 
to the aggregate amount of build-up levies that would have been payable by 
all Scheme members for that year, calculated in accordance with subsection 
(4)(a)(i).

6. Calculation of contribution for new Scheme members

(1A) This section applies to a Scheme member that becomes a member of the 
Scheme by virtue of section 12(3) of this Ordinance on or after the 
commencement of this Schedule.  (Added L.N. 107 of 2006)
(1) The amount of contribution payable by a Scheme member for the year in 
which it becomes a member of the Scheme—  (Amended L.N. 107 of 2006)
(a) shall be calculated on the basis of the amount of relevant deposits 
maintained with the Scheme member as at the date it becomes a member of 
the Scheme; and  (Amended L.N. 107 of 2006)
(b) is that proportion of the amount of projected full-year contribution 
for that year that the number of days during which the Scheme member is a 
member of the Scheme in that year bears to 365.
(2) If a Scheme member becomes a member of the Scheme after the specified 
date in any particular year, the amount of contribution payable for the 
subsequent year shall be calculated on the basis of the amount of relevant 
deposits maintained with the Scheme member as at the date it becomes a 
member of the Scheme.  (Amended L.N. 107 of 2006)
(3) In this section, "projected full-year contribution" (預計全年供款), in 
relation to a year in which a Scheme member becomes a member of the 
Scheme, means the amount of contribution that would have been payable by 
the Scheme member if that Scheme member had been a member of the Scheme 
during the whole of that year.  (Amended L.N. 107 of 2006)

7. Minimum amount of contribution

Notwithstanding anything in this Schedule, if the amount of contribution 
payable by a Scheme member for any year is less than $50000, a minimum 
contribution equal in amount to that proportion of $50000 that—  (Amended 
L.N. 107 of 2006)
(a) in the case of the start-up year—
(i) where the Scheme member becomes a member of the Scheme before the 
commencement of this Schedule, the number of days during which this 
Schedule is in operation in that year bears to 365;
(ii) where the Scheme member becomes a member of the Scheme on or after 
the commencement of this Schedule, the number of days during which the 
Scheme member is a member of the Scheme in that year bears to 365; or
(b) in the case of any other year, the number of days during which the 
Scheme member is a member of the Scheme in that year bears to 365,
is payable by the Scheme member for that year.  (Amended L.N. 107 of 2006)

8. Rebate

(1) A rebate shall be made by the Board in any year if 115% of the target 
fund size for that year is smaller than the balance of the Fund as at the 
specified date of the immediately preceding year.that—  (Amended L.N. 107 
of 2006)
(2) For any year in which a rebate is required to be made by the Board, 
the amount of rebate payable to a Scheme member is such portion of the 
aggregate amount of rebates payable to all Scheme members in that year, 
calculated in accordance with subsection (3), that the amount of net 
contribution by the Scheme member during the relevant period bears to the 
aggregate of the amount of net contribution by each of the Scheme members 
during the same period.
(3) The aggregate amount of rebates payable to all Scheme members in any 
particular year is 30% of the amount by which the balance of the Fund as 
at the specified date of the immediately preceding year exceeds the target 
fund size for that particular year.  (Amended L.N. 107 of 2006)
(4) In this section—
"amount of net contribution" (供款淨額), in relation to a Scheme member during 
a period, means the amount of contribution paid by the Scheme member 
during the period less the amount of rebate received by the Scheme member 
during that period;
"relevant period" (有關期間) means the period of 10 years immediately 
preceding the year in which the rebate is required to be made by the Board 
or the period since the commencement of this Schedule, whichever is the 
shorter.

9. Refund of contribution

(1) A proportion of the contribution paid by a Scheme member for the year 
in which it ceases to be a member of the Scheme shall be refunded to that 
Scheme member.
(2) The amount to be refunded is that proportion of the contribution that 
the number of days within the relevant period in the year bears to the 
number of days within the contribution period in that year.  (Amended L.N. 
107 of 2006) 
(3) In this section—
"contribution period" (供款期間)—
(a) in relation to the start-up year—
(i) in the case where the Scheme member becomes a member of the Scheme 
before the commencement of this Schedule, means the period during which 
this Schedule is in operation in that year; or
(ii) in the case where the Scheme member becomes a member of the Scheme on 
or after the commencement of this Schedule, means the period that begins 
on the date on which the Scheme member becomes a member of the Scheme and 
expires on 31 December of that year;
(b) in relation to any other year—
(i) in the case where the Scheme member is a member of the Scheme on 1 
January of that year, means the period that begins on 1 January and 
expires on 31 December of that year; or
(ii) in the case where the Scheme member becomes a member of the Scheme 
after 1 January of that year, means the period that begins on the date on 
which the Scheme member becomes a member of the Scheme and expires on 31 
December of that year;
"relevant period" (有關期間), in relation to a year, means the period that 
begins on the date on which a Scheme member ceases to be a member of the 
Scheme and expires on 31 December of that year.  (Added L.N. 107 of 2006)