Banks offer a wide range of products and services. Apart from providing traditional deposit and loan services, banks also sell investment, insurance and MPF products to customers. Therefore, the HKMA needs to work closely with other regulators to ensure comprehensive protection of public interests.
The HKMA and the Securities and Futures Commission (SFC) work very closely to ensure that there is an open market for all intermediaries in the securities industry of Hong Kong. The HKMA has entered into a Memorandum of Understanding with the SFC, which elaborates on the legal framework and sets out the operational details relating to the respective roles and responsibilities of the two regulators regarding the securities related activities of authorized institutions. The HKMA and the SFC hold regular meetings under the Memorandum of Understanding to discuss matters of mutual interest. The training programmes of either regulator are also made available to the staff of the other where relevant.
The HKMA and the Insurance Authority (IA) entered into a Memorandum of Understanding on 19 July 2019 which sets out the framework for coordinating the regulation and supervision of entities or financial groups in which the two regulators have a common regulatory interest, and the collaborative arrangements with respect to the regulation and supervision of authorized institutions’ businesses of regulated activities under the Insurance Ordinance. This Memorandum of Understanding has taken effect when the insurance intermediary regime under the Insurance Ordinance came into operation on 23 September 2019 and has superseded the previous Memorandum of Understanding between the HKMA and the IA signed on 19 September 2003.
Alongside the implementation of the group-wide supervision regime for insurance groups by the IA under the Insurance Ordinance, the HKMA and the IA signed a separate Memorandum of Understanding on 14 May 2021 to set out the collaborative arrangements between the two regulators in relation to the regime.
The Hong Kong Deposit Protection Board (the Board) is a statutory body established under the Deposit Protection Scheme Ordinance to administer the Deposit Protection Scheme in Hong Kong. The Scheme provides protection for deposits up to HK$500,000 per depositor per member bank. Sharing the objective of promoting the stability of the banking system, the HKMA and the Board have signed a Memorandum of Understanding. The Board is required by the Deposit Protection Scheme Ordinance to perform its functions through the HKMA, while the HKMA provides support to the Board on a day-to-day basis.
The Financial Reporting Council (FRC) is a statutory body established by the Financial Reporting Council Ordinance to investigate into auditing and reporting irregularities in relation to listed entities, and to enquire into non-compliances with relevant accounting requirements in listed entities' financial reports. The Ordinance provides that the FRC shall notify the HKMA where the listed entity that is the subject of investigation or enquiry is an authorized institution or its related company (i.e. controller, subsidiary or fellow subsidiary), and that the investigator or enquirer has to consult the HKMA prior to exercising the relevant powers under the Ordinance for the purpose of such investigation or enquiry. The HKMA and the FRC have entered into a Memorandum of Understanding to elaborate on the mechanisms for communication and information exchange between the two entities, as well as to enhance the ongoing cooperation and mutual assistance.
As an international financial centre, Hong Kong not only attracts foreign banks to operate in Hong Kong, but local banks are also active in other overseas markets. To enhance the exchange of supervisory information and co-operation, the HKMA has entered into Memoranda of Understanding (MoUs) or other formal arrangements with the relevant banking supervisory authorities outside Hong Kong:
|Jurisdictions||Supervisory Authorities||Types of Arrangements|
|Australia||Australian Prudential Regulation Authority||MoU|
|Belgium||Financial Services and Markets Authority
National Bank of Belgium
|Letters on Co-operations and Sharing of Information|
|Canada||The Office of the Superintendent of Financial Institutions||MoU|
|Cambodia||National Bank of Cambodia||MoU|
|Mainland China||The People's Bank of China
China Banking and Insurance Regulatory Commission
|Denmark||The Danish Financial Supervisory Authority||MoU|
|France||Autorité de contrôle prudentiel et de résolution||Letters on Co-operation and Sharing of Information|
|Germany||Bundesanstalt fur Finanzdienstleistungsaufsicht||MoU|
|India||Reserve Bank of India||MoU|
|Japan||Financial Services Agency||Letters on Co-operations and Sharing of Information|
|Liechtenstein||The Financial Market Authority Liechtenstein||MoU|
|Macau||Autoridade Monetaria De Macau||MoU|
|Malaysia||Bank Negara Malaysia||MoU|
|Mauritius||Bank of Mauritius||MoU|
|Pakistan||State Bank of Pakistan||MoU|
|Philippines||Bangko Sentral ng Pilipinas||MoU|
|South Africa||The South African Reserve Bank||MoU|
|South Korea||The Financial Supervisory Commission of Korea||MoU|
|Switzerland||Swiss Financial Market Supervisory Authority||MoU|
|Taiwan||Financial Supervisory Commission||MoU|
|Thailand||The Bank of Thailand||Statement of Co-operation|
|United Kingdom||Financial Conduct Authority
Prudential Regulation Authority
|United States||New York State Department of Financial Services
The Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation
Statement of Co-operation
|Vietnam||State Bank of Vietnam||MoU|
In general, the co-operative arrangements provide the formal framework under which the HKMA and its counterparts agree to:
The HKMA continues to extend its bilateral co-operation with banking supervisors in other economies, and contact or hold regular meetings with other supervisory authorities to discuss matters of common interest where necessary.
The HKMA has entered into MoU with competent authorities of 29 European Union or European Economic Area jurisdictions respectively (Note 1) concerning consultation, cooperation and the exchange of information related to the supervision of authorized institutions acting as depositaries appointed for alternative investment funds under the Alternative Investment Fund Managers Directive (AIFMD MoU). The AIFMD MoU, as required by the AIFMD (Note 2), are in identical terms and conditions.
The HKMA has also entered into similar MoU with the Financial Conduct Authority of the United Kingdom concerning consultation, cooperation and the exchange of information related to the supervision of authorized institutions acting as depositaries appointed for alternative investment funds.