Cap 581 s 13 Exemption (DEPOSIT PROTECTION SCHEME ORDINANCE)

Contents of Section

Chapter:	581	Title:	DEPOSIT PROTECTION SCHEME ORDINANCE	Gazette Number:	L.N. 219 of 2004
Section:	13	Heading:	Exemption	Version Date:	25/02/2005

(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);

(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

(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.