Monetary Authority revokes the direction on Octopus Cards Limited

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that the Monetary Authority (MA) has, after consultation with the Financial Secretary pursuant to section 53F(1) of the Banking Ordinance, exercised his power to revoke the direction on Octopus Cards Limited (OCL) to seek advice from Professor Andrew Chan Chi-fai as Advisor on its affairs. The revocation of the direction shall take effect from 23 May 2009.

The direction on OCL to seek advice from Professor Chan, Associate Dean of the Faculty of Business Administration of the Chinese University of Hong Kong and Chairman of the Hong Kong Deposit Protection Board, on its affairs was given by the MA on 16 February 2007 under section 52(1)(B) of the Banking Ordinance following the discovery of incidents in which Octopus cardholders failed to add value to their cards but moneys were deducted from their bank accounts.

OCL has made refunds to the customers affected by the failed add-value incidents and implemented the recommendations of the independent auditors, PricewaterhouseCoopers, as required by the MA to strengthen OCL's risk management and internal control over the operation of the Octopus system and the protection of Octopus cardholders' interests. Following recent reviews in consultation with Professor Chan, the MA has determined that it is no longer necessary for the direction on OCL to remain in force.

An HKMA spokesperson said that notwithstanding the revocation of the direction, as an institution authorized under the Banking Ordinance, OCL will continue to be supervised by the HKMA and is required to ensure that its systems remain robust to protect the interests of Octopus cardholders.

For further enquiries, please contact:
Thomas Chan, Communications Chief, at 2878 1480 or
Hing-fung Wong, Manager (Communications), at 2878 1802

Hong Kong Monetary Authority
22 May 2009