Use of Banking Names and Descriptions

Circulars

09 Apr 2002

Use of Banking Names and Descriptions

Our Ref :
B2/5C
B9/23C

9 April 2002

The Chief Executive
All Restricted Licence Banks

Dear Sir/Madam,

Use of Banking Names and Descriptions

The HKMA has recently completed a review of the market entry criteria for the banking sector and the three-tier authorization system. One of the proposals arising from the review is to allow locally incorporated restricted licence banks (RLBs) which are subsidiaries of banks to use banking names and descriptions.

To give effect to this proposal, the Monetary Authority has issued today a new general consent (enclosed) under section 97(1) of the Banking Ordinance, which supersedes the previous consent issued on 15 November 1995. This new consent will take effect immediately and will be published in the Government Gazette on 12 April 2002.

Under the new consent, a locally incorporated RLB may use the name of its parent bank in the name under which it is carrying on business in Hong Kong provided that such name is used in immediate conjunction with the term "restricted licence bank" and is not more prominent than such term (see paragraph (a)(i) of the consent). This is consistent with the treatment afforded to RLBs incorporated outside Hong Kong by virtue of section 97(4) of the Ordinance.

A locally incorporated RLB may also use the name of its parent bank in the description under which it is carrying on business in Hong Kong on the condition that such description is solely for the purpose of indicating its relationship with the bank (see paragraph (a)(ii) of the consent). The same treatment also applies to a RLB incorporated outside Hong Kong which is a subsidiary of a bank (see paragraph (b) of the consent). It follows that banking descriptions used by RLBs, wherever incorporated, must be qualified by terms such as "a member of" or "a subsidiary of" etc. Where a RLB wants to use banking descriptions without such qualifications (e.g. a logo which contains the word "bank"), it must seek the specific consent of the Monetary Authority under section 97(1) of the Ordinance.

Should you have any queries regarding this issue, please contact Ms Linda Yiu at 2878 8280 or Mr Raymond Chan at 2878 1846.

Yours faithfully,

(Raymond Li)
Executive Director (Banking Development)

 

Encl.
General Consent granted by the Monetary Authority under Section 97(1) of the Banking Ordinance
c.c.
Hong Kong Association of Banks (Attn: Ms Eva Wong)
The DTC Association (Attn: Mr PC Lund)
Financial Services Bureau (Attn: Ms Kinnie Wong)
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Last revision date : 01 August 2011