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SELECTED TOPIC OF REPORTING: FINANCIAL AND COMPANIES ISSUES (I). Stanley Ma English News Writing & Reporting II 23-4-2009. Overview. Financial Services and Treasury Bureau Policy areas Banking system Monetary policy Stakeholders. Financial News Reporting. Financial policies
SELECTED TOPIC OF REPORTING: FINANCIAL AND COMPANIES ISSUES (I) Stanley Ma English News Writing & Reporting II 23-4-2009
Overview • Financial Services and Treasury Bureau • Policy areas • Banking system • Monetary policy • Stakeholders
Financial News Reporting • Financial policies • Monetary policy (貨幣政策) • Financial Market 金融市場 • Stocks & Futures (股票及期貨) • Forex(外匯) • Companies affairs • Listing companies上市公司消息 • Banking (retail banks and merchant banks) • Financial services
Policy Makers John C Tsang Financial Secretary Prof. K C Chan Secretary for Financial Services and Treasury
Financial Services & Treasury Bureau Treasury Branch 庫務科 Financial Services Branch 財經事務科 Miss Au King-chi Permanent Sect for Financial Services & Treasury Stanley Y.H. Ying Permanent Sect for Financial Services & Treasury
Financial Services Branch (Aims) • maintain and enhance Hong Kong’s status as a major international financial centre; • maintain the integrity and stability of the monetary and financial system of Hong Kong; • ensure orderly and efficient operation as well as prudent and appropriate supervision and regulation of the financial markets and services; and • provide a business environment which is open, fair and conducive to market development.
Financial Services Branch (Policy Areas) • the formulation of policy and introduction of legislation covering the securities, banking and monetary systems; insurance, provident fund and retirement scheme business; companies, insolvency, and accountancy matters; • assisting the Financial Secretary in overseeing the relevant regulatory authorities, namely the Hong Kong Monetary Authority (金融管理局), the Securities and Futures Commission(證監會), the Mandatory Provident Fund Schemes Authority (強職金管理局)and the Insurance Authority(保險業監理局); • co-ordinating and facilitating implementation of new initiatives on financial infrastructure and human resources development in the financial services sector which enhance Hong Kong’s competitiveness; • facilitating the market to innovate and introduce new financial products for greater liquidity; and • overseeing the operation of the Census and Statistics Department(統計處), the Companies Registry (公司註冊處)and the Official Receiver’s Office(破產管理處).
Topical Issues • Rewrite of Companies Ordinance 檢討《公司條例》 • Deposit Protection 存款保障 • Clearing and Settlement system 結算及交收系統 • Procedure related to the affairs conducted by Securities and Future Commission 有關證監會一切程序事宜
Responsibilities • Drawing up and applying overall public expenditure guidelines • Managing and coordinating the annual resource allocation exercise • Managing the Government's revenue policy and administration • Laying down and implementing policies and procedures to ensure effective control and management of public revenues and expenditure, including assets and investments
Hong Kong as leading banking centres • 140 licensed banks (LBs) • Owned by 27 countries • 110 foreign banks with 51 branches • 24 local banks with 1133 branches • 6 mainland banks with 44 branches No restriction on the number of branches that foreign banks could maintain
Hong Kong Monetary Authority • Assumes most of the central banking functions in Hong Kong • Except the issues of bank notes (發鈔) • Hong Kong Bank • Standard Chartered Bank (HK) • Bank of China (HK)
Deregulation of Interest Rates • In 2001 the Interest Rate Rules (IRR) of the Committee of the Hong Kong Association of Banks (HKAB) were abolished, marking the final stage in the deregulation of bank interest rates • Banks are now free to set interest rates on deposits by themselves • What is the impact ??????
Clearing & Settlement 交易及結算 • Hong Kong dollar, US dollar or Renminbi checks issued by local banks generally clear overnight. • Foreign checks issued by overseas financial institutions clearing times depend on your relationship with your banker: Sometimes banks will buy a foreign check immediately, while at other times overseas checks take three weeks to clear. • Many banks now charge a small fee if you deposit a foreign check into a foreign currency account
Types of Banks in Hong Kong • Licensed Banks • Licensed banks may operate current and savings accounts, and accept deposits of any size and maturity from the public and pay or collect cheques drawn by or paid in by customers • Restricted license banks • Restricted licence banks are principally engaged in merchant banking and capital market activities. They may take deposits of any maturity of HK$500,000 and above
Deposit-taking companies • Deposit-taking companies are mostly owned by, or associated with, banks. These companies engage in specialised activities such as consumer finance (hire-purchase) and securities business. They may take deposits of HK$100,000 or above with an original term of maturity of at least three months
Investment Banking (投資銀行) • Mergers and Acquisitions advisory 公司收購及合併 • Debt and Equity Capital Market 資本及借貸市場 • Sales and Trading of Equities and Equities Research 資產售賣 • Credit & Rate Markets 借貸及利率市場 • Private Banking and Investment Management
Investment Banks (i-Bank) • J P Morgan Hong Kong • Restricted License Bank operated in the field of merchant banking • Corporate finance 公司融資安排and Initial Public Offer (IPO)(公司上市) • Corporate financing – debt financing – borrow money with securities (抵押品) • IPO – arrange a company to be listed on Hong Kong Stock Exchange
The Hong Kong Monetary Authority • Hong Kong‘s central banking institution (中央銀行)(more precisely, currency board). • It is a government authority founded on 1 April 1993 via the consolidation of “Office of the Exchange Fund” (外匯基金管理局)and the “Office of the Commissioner of Banking”(銀行業監理專員). • The organisation reports directly to the Financial Secretary
The fund was established and managed originally by the "Currency Ordinance" in 1935. It is now named the "Exchange Fund Ordinance". • Under the Exchange Fund Ordinance, the HKMA's primary objective is to ensure the stability of the Hong Kong currency, and the banking system. It is also responsible for promoting the efficiency, integrity and development of the financial system • The HKMA issues banknotes only in the denomination of ten Hong Kong dollars. The role of issuing other banknotes is delegated to the note-issuing banks in the territory, namely the Hong Kong and Shanghai Banking Corporation, Standard Chartered Bank and the Bank of China.
Currency Policy • The official reserves (外匯儲備)of Hong Kong and the banking system are important underpinnings of the Linked Exchange Rate System(聯繫匯率)
Monetary Stability • The Interest Rate Adjustment Mechanism is an automatic system that maintains the stability of the Hong Kong dollar exchange rate
Stakeholders • Banks and financial institutions • Professional bodies • The Hong Kong Association of Banks 香港銀行公會 • no fully licensed bank can operate in the Hong Kong Special Administrative Region ("HKSAR") without being a member of HKAB and is thus subject to HKAB's rules • Hong Kong Institute of Certificate Public Accountants (HKICPA)
Market Operator and Regulator • Hong Kong Stock Exchange (聯合交易所) • Before 1986: Hong Kong Stock Exchange, Far East Exchange, Kowloon Stock Exchange, and Kam Ngan Exchange • Main Board & Growth Enterprise Market (G.E.M) • As a regulator: Listing Rules (上市規則) • Also a listing company as “HKSE (0388)” • Hong Kong Future Exchange (期貨交易所)
Regulator (監管機構) • Securities and Futures Commission (證劵業監理委員會) • Listing companies 上市公司 • Stock and securities brokers 證券公司 • Derivatives 衍生工具 • Market fairness and openness • Sanction market misconduct • Insider dealing 內幕交易 • False trading (虛假交易) • Price rigging (操控格價) • Stock market manipulation (操控市場)
Sanction (civil and criminal) • SFC may refer case to the Financial Secretary for any market misconduct • FS may refer the case to Market Misconduct Tribunal市場失當審裁處 • The Tribunal has power to inquire into any insider dealing or any other market misconduct • SFC will refer serious case to the Department of Justice for criminal prosecution
THE END OF PART I To be continued ………