The HKMA is Hong Kong’s central banking institution. The HKMA has four main functions:
The HKMA was established on 1 April 1993 after the Legislative Council passed amendments to the Exchange Fund Ordinance in 1992 empowering the Financial Secretary to appoint a Monetary Authority.
The powers, functions and responsibilities of the Monetary Authority are set out in the Exchange Fund Ordinance, the Banking Ordinance, the Deposit Protection Scheme Ordinance, the Payment Systems and Stored Value Facilities Ordinance and other relevant Ordinances.
The Monetary Authority is appointed under the Exchange Fund Ordinance to assist the Financial Secretary in performing his functions under the Exchange Fund Ordinance and to perform such other functions as assigned by other Ordinances or by the Financial Secretary. The office of the Monetary Authority is known as the HKMA, and the Monetary Authority is the Chief Executive of the HKMA.
The Exchange Fund is under the control of the Financial Secretary. The Monetary Authority, under delegation from the Financial Secretary, is responsible to the Financial Secretary for the use of the Exchange Fund, and for the investment management of the Fund. In his control of the Exchange Fund the Financial Secretary is advised by the Exchange Fund Advisory Committee (EFAC), which is established under the Exchange Fund Ordinance.
EFAC is assisted in its work by five sub-committees, which monitor and advise on specific areas of the HKMA’s work and make recommendations to the Financial Secretary through EFAC. These sub-committees include the Governance Sub-Committee, the Audit Sub-Committee, the Currency Board Sub-Committee, the Investment Sub-Committee, and the Financial Infrastructure and Market Development Sub-Committee.
Yes, the HKMA Information Centre, consisting of an exhibition centre and a library, is an important resource for introducing the work of the HKMA to the community and promoting public awareness of monetary and banking matters. The Centre is open to the public for free. Guided tours are available on a daily basis. Group visits for schools, tertiary institutions, and non-profit organisations can also be arranged upon request.
For more information about the Information Centre, please call (852) 2878 1111 or visit its webpage.
Section 103 of Part XI of the Crimes Ordinance (Cap. 200 of the Laws of Hong Kong) provides the legal basis for the HKMA to approve reproduction of Hong Kong currency notes. Provisions in Part XI of the Ordinance target counterfeiting and kindred offences (including reproduction of Hong Kong currency notes), with an aim to protecting the public. Indeed, some citizens had suffered monetary losses in the past as a result of receiving counterfeit notes, so these legal provisions have their practical relevance.
Having said that, there may be a need for the public to reproduce or print images of currency notes from time to time under some special circumstances, such as for production of films or educational materials. Therefore, the Ordinance provides a mechanism for the public to apply to the HKMA for lawful reproduction of currency notes for such specific purposes. The applicants however must comply with certain conditions so as to prevent the replica notes from falling into the wrong hands who might use them to deceive the public.
Under section 103 of the Crimes Ordinance (Cap. 200 of the Laws of Hong Kong), a person who, without the consent in writing of the Monetary Authority, reproduces on any substance whatsoever, and whether or not to the correct scale, any Hong Kong currency note or any part of a Hong Kong currency note, commits an offence.
The above provision applies to any Hong Kong currency note which has been lawfully issued in Hong Kong, despite that the note may no longer be in day to day circulation.
Individuals and institutions may apply. The HKMA also accepts applications made by authorised persons.
In the past, applications received by the HKMA were mostly for educational and instructional purposes, advertisement and for shooting films or TV programmes etc.
Similar to Hong Kong, other parts of the world also have stringent controls on reproduction of currency notes, although the specific requirements may vary. In jurisdictions like the US, the UK, Australia, Canada and Singapore, only one-sided reproduction of currency notes is allowed. In Hong Kong and the European Union (EU), two-sided reproduction is permitted. For Hong Kong, the replica notes must be at least 20% larger or smaller than the actual size of the notes. That means the length and width of the replicas only need to be 10% longer or shorter than the genuine notes. In the EU, on the other hand, the size of the reproduction is at least 200% of both the length and width or at most 50% of both the length and width of the actual notes. In some jurisdictions, as long as certain criteria are met (e.g. one-sided reproduction), application for approval can be exempted.
Unless the electronic images of currency notes are to be reproduced into a physical form, approval by the HKMA is not required for the filming of currency notes for viewing on mobile phones and electronic screens, as such electronic images cannot be passed as currency notes. Nor is approval required for making of electronic or print images of currency notes by the media for news reporting purposes.
Since section 103 of the Crimes Ordinance applies to Hong Kong currency notes only, the HKMA is not empowered to process applications for reproduction of foreign currency. Those who wish to reproduce currency notes of other countries should study the laws and regulations of the respective countries and assess the legal risks, including ss.96-102 of the Crimes Ordinance (Cap. 200 of the Laws of Hong Kong). If in doubt, please seek independent legal advice.
Applicants may make a written application in the following ways:
The applicant should submit a completed application form and relevant information to the HKMA.
Upon receipt of the application, the HKMA will reply to the applicant granting him/her an interim approval to prepare a sample of the presentation for review by the HKMA and Commercial Crime Bureau of Hong Kong Police Force. The HKMA, after confirming that the sample(s) and details submitted are in compliance with the requirements, will issue a written approval. Generally speaking, the processing time will take around 2 weeks. To avoid infringing intellectual property rights, applicants may also need to obtain the approval of the concerned note-issuing banks or the Information Services Department of the HKSAR Government (for the Government $10 notes) for consent to use their currency note images. The contact details are as follows:
Please refer to General Conditions on Reproduction of Hong Kong Currency Notes as Stage Money; General Conditions on Reproduction of Hong Kong Currency Notes for Advertisements Purposes; and General Conditions on Reproduction of Hong Kong Currency Notes for Educational or Instructional Purposes.
Apart from requirements on the design layout and wording, the number of notes to be reproduced (for stage money) should be reasonable.
Please refer to General Conditions on Reproduction of Hong Kong Currency Notes as Stage Money; General Conditions on Reproduction of Hong Kong Currency Notes for Advertisements Purposes; and General Conditions on Reproduction of Hong Kong Currency Notes for Educational or Instructional Purposes.
The HKMA would provide contact details of the Police in the approval letter, to facilitate communication between the applicant and the Police on follow up work.
Interbank interest rates in Hong Kong normally follow closely the movements of their US counterparts under the Linked Exchange Rate system (LERS). The size of the interest rate spread between the Hong Kong dollar and US dollar mainly reflects the premium (be it positive or negative) that investors demand on the Hong Kong dollar. Should the interest rate differential get out of line with market expectation, funds will flow to the currency with relatively higher interest rates to reap the arbitrage profits.
Retail interest rates, including time deposit rates, are determined by market forces. Likewise, the best lending rate, which is the benchmark interest rate offered by banks on their loans to customers, is subject to commercial decisions by individual banks. Given that interbank funding is a major source of funding for the banking system, retail interest rates will be influenced by movements in interbank interest rates.
A currency board system is a rule-based monetary regime encompassing two distinct features: full reserve-backing requirement of the monetary base, and an explicit commitment of the currency board or monetary authority to convert the domestic currency into a reserve currency at a prescribed fixed exchange rate.
The backing rule forbids central bank’s creation of unbacked monetary liabilities through lending to the public or the private sector. The monetary discipline so imposed, together with the explicit commitment to the fixed exchange rate between the domestic currency and the reserve currency, adds credibility to the currency board system, and has led to the perception that it is a particularly robust form of fixed exchange rate system.
The HKMA operates within the Convertibility Zone taking into account market conditions, including the exchange rate, interest rates, the Aggregate Balance and other relevant market information. It will also monitor whether there are market anomalies that may arise from time to time, which may affect the smooth functioning of the LERS.
In its meeting in July 2005, the Exchange Fund Advisory Committee Currency Board Sub-Committee endorsed four broad principles that should govern operations within the Convertibility Zone: (i) all operations should be carried out in strict accordance with Currency Board rules; (ii) the primary objective of any operations should be to preserve exchange rate stability implied by the LERS and to maintain confidence in the system; (iii) operations might be undertaken to support such interest rate adjustments as would maintain exchange rate stability under the LERS and would avoid destabilising behaviour in interest rates; and (iv) operations might also be undertaken in order to remove market anomalies. While these four principles should be generally applicable for the time being, they will be kept under review in the light of experience and changing conditions.
The principle of “one country, two systems” is clearly enshrined in the Basic Law. Article 111 stipulates that “The Hong Kong dollar, as the legal tender in the Hong Kong Special Administrative Region, shall continue to circulate.” We do not envisage any change to the legal tender status of the Hong Kong dollar when the renminbi becomes fully convertible.
The LERS suits Hong Kong as it is a small and open economy. As Hong Kong’s economic growth is driven mainly by external factors, the cost of a more volatile exchange rate will be much larger than the cost of a volatile domestic sector. The LERS has been the anchor of Hong Kong’s monetary and financial stability for more than 30 years and has proved highly resilient in a series of regional and global financial crises during this period.
Separately, even though central banks operating under a floating exchange rate regime can deploy independent monetary policy to conduct macroeconomic management theoretically, such benefits may not be realisable for small and open economies. Theoretically, they could raise interest rates or let their currency appreciate to mitigate inflation. But according to the experience of many emerging market economies, the resultant widening of interest rate spread or the appreciation of domestic currency might heighten speculations for further currency appreciation, attracting capital inflows and hot money, and thus weakening or even offsetting the effectiveness of monetary policy tightening. As such, it could intensify risks to financial markets and the wider economy by intensifying the currency appreciation pressure in the short term and hence heightening the risk of subsequent sharp currency depreciation upon abrupt reversal of fund flows. Hong Kong, being a small and open economy and international trade and financial centre, may see large fluctuations in the exchange rate of its currency should a floating exchange rate regime be adopted. This is not conducive to external trade and cross-border investment.
The effectiveness of the LERS is helped by a number of economic attributes enjoyed by Hong Kong:
First, the structure of Hong Kong economy is flexible and responsive. Markets such as the labour market, property and retail markets respond quickly to changing circumstances: this flexibility facilitates adjustments in internal prices and costs, which in turn bring about adjustments to external competitiveness without the necessity of moving the exchange rate.
Secondly, Hong Kong’s banking system is strong and solvent, and well able to cope with the fluctuations in interest rates which may arise under the LERS.
Thirdly, the Hong Kong SAR Government pursues a prudent fiscal policy, with large accumulated fiscal surpluses and a target of budgetary balance over the medium term. Thus there is no fear that the exchange rate system might be undermined by monetary financing of government expenditure.
Fourthly, Hong Kong possesses ample foreign currency reserves including sufficient US dollar assets for supporting the LERS. Hong Kong’s official foreign currency reserve assets cover about seven times the currency in circulation and are among the highest in the world.
The LERS rules out the use of nominal exchange rate movements as a mechanism of adjustment. Thus, shocks to the economy triggered by external or domestic events, such as sharp depreciations of the currencies of Hong Kong’s competitors or recession in export markets, may necessitate more adjustments of the internal cost/price structure than would be needed if the exchange rate were free to adjust. While such internal adjustment is slower than rapid adjustment by the exchange rate, the process may be accompanied by more durable and necessary structural adjustments within the real economy. The LERS leaves little scope for an autonomous interest rate policy to achieve the objectives of price stability or promotion of economic growth. Nevertheless, the flexible economic structure in Hong Kong enables its economy to adapt quickly to changing circumstances. Hong Kong’s economic growth performance has been impressive under the LERS since 1983.
Hong Kong’s inflation depends on a number of domestic and external factors. The LERS has not been the main factor in driving inflation higher in Hong Kong. The pick-up of inflation in the past few years was partly due to global factors such as weather and imbalance of supply and demand, which had no direct relationship with the exchange rate regime. In addition, Hong Kong spends more on services than goods. Goods (including those imported) constitute only about a quarter of Hong Kong’s consumption basket. Therefore, the exchange rate has not been a key factor in driving Hong Kong’s inflation.
Movements in local asset prices are subject to various factors. For example, property prices are determined by factors such as interest rates, demographic structure, land and housing supply, the prospect of household income, etc. Many emerging market economies with more flexible exchange rate regimes are not immune from the problem of influx of capital and asset bubbles in the past few years.
Many research studies find that monetary policy is not the most effective tool for targeting asset prices as it is difficult to confine the impact of discretionary interest rate policy to individual asset markets while leaving other financial markets and the broader economy unaffected. If used to tackle the overheated property market, interest rates may have to be raised substantially and this may cause damage to other economic sectors. Targeted and sector-specific policies relating to housing supply, and macro-prudential and demand management measures would be more appropriate tools for tackling property market overheating.
LERS remains appropriate for Hong Kong, being a small and open economy (see 5). Although pegging to a basket of currencies has the benefit of being less exposed to sharp swings in the exchange rate and interest rates of a single anchor currency, Hong Kong has already benefited from a largely stable monetary environment in the US and the credibility of US monetary policy. Moreover, pegging to a basket of currencies lacks not only an independent monetary policy, but also the transparency, simplicity and operational efficiency as compared with the existing LERS under the Currency Board system.
The USD continues to be the most appropriate anchor currency of the HKD for the following reasons:
First, the anchor currency for the HKD must be fully convertible and can be traded freely in very large amounts in the foreign exchange market. The anchor currency should also be an international reserve currency that can facilitate foreign exchange operations and reserves management. The USD is the most commonly used currency for international trade and financial transactions. The US financial markets as well as those financial markets with transactions settled and denominated in the USD rank first in the world in terms of depth, breadth and liquidity. Moreover, having maintained low inflation in the US for over 30 years, the US Federal Reserve has a good track record in fostering price stability.
Second, the economy of the anchor currency and the Hong Kong economy should have synchronised business cycles. Our empirical research results show that Hong Kong’s business cycles are still more synchronised with those of the US than with Mainland China despite the increasing economic integration between Hong Kong and Mainland China. Hong Kong as an international trade and financial centre has mainly been playing a bridging role between Mainland China and the rest of the world. Its business cycles are therefore very much affected by trade and fund flows between the Mainland and the advanced economies, and less by fluctuations in the Mainland’s domestic economy. As the ultimate goal of monetary policy, including exchange rate policy, is to reduce the volatility of business cycles, a peg to USD continues to be the most appropriate arrangement for Hong Kong.
Re-pegging to the USD at a new level or widening the exchange rate band will likely fail to influence fund flows or asset prices. It may however invite market speculations on the likelihood of further band-widening or re-pegging in the future, thereby undermining the credibility of the LERS and encouraging more speculative flows into or out of Hong Kong.
In response to the Asian financial crisis, the HKMA introduced seven technical measures in September 1998 to strengthen the Currency Board arrangements to make them less susceptible to manipulation by speculators. Furthermore, in May 2005, the HKMA introduced three refinements to the operations of the LERS, which aimed at removing uncertainty about the extent to which the HKD exchange rate might strengthen under the LERS. In the light of changing market environment, the HKMA will from time to time review the operations of the LERS and would not rule out introducing measures to optimise the system if necessary. Nonetheless, we do not see any need to introduce such measures at present. The LERS has been working according to its design and the HKMA will continue to ensure its effective operation.
Notes and coins issued according to the Legal Tender Notes Ordinance (Chapter 65) and the Coinage Ordinance (Chapter 454) are legal tender in Hong Kong. As legal tender, they are regarded by law as valid and legal means of payment to adequately and effectively fulfill payment obligations.
However, as in all commercial transactions, both parties can determine the terms of transaction on their own, including the means of payment. Whether to accept any notes or coins as payment is a commercial decision for goods or service providers. The above Ordinances do not confer authority upon the Government to force goods or service providers to accept any notes or coins.
Banknotes ($20, $50, $100, $500 and $1,000) in Hong Kong are issued by three note-issuing banks, namely The Hongkong and Shanghai Banking Corporation Limited, Standard Chartered Bank (Hong Kong) Limited and Bank of China (Hong Kong) Limited whereas the $10 currency notes and coins are issued by the Hong Kong Special Administrative Region Government.
Consent of note-issuing banks must be obtained before reproducing images of banknote as they own the copyrights of such images, and similarly consent of the Director of Information Services must be obtained before reproducing images of government notes and coins. Otherwise, the reproduction might infringe their copyright in the design of the relevant currency notes and coins.
Under the Laws of Hong Kong, a person who, without the consent in writing of the Monetary Authority, reproduces on any substance whatsoever, and whether or not to the correct scale, any Hong Kong currency note or any part of a Hong Kong currency note, commits an offence. Unless the electronic images of currency notes are to be reproduced into a physical form, approval by the HKMA is not required for the filming of currency notes for viewing on mobile phones and electronic screens, as such electronic images cannot be passed as currency notes.
Generally speaking, if a banknote is defaced or damaged, there is the possibility that it may not be accepted by other people or retailers. Holders of banknotes should try to keep their banknotes intact to protect their own interests.
Should a banknote be defaced or damaged, the public may request the relevant note-issuing bank for exchange. The bank will authenticate the banknote according to established criteria, such as the degree of smear or damage, the integrity of the security features, to determine whether it can be given full face value. Since the degree of damage or smear may vary, the note-issuing banks will consider each banknote individually.
Hong Kong dollar banknotes issued by the three note-issuing banks remain legal tender irrespective of the issue date. The 2010 Series and all banknotes issued before 2010 can be used for transactions or exchanged into the latest 2018 Series by the respective issuing bank anytime if needed.
Individual banks are required to develop their own account opening procedures taking into account all relevant legal and regulatory requirements, including but not limited to the Anti-Money Laundering and Counter Terrorist Financing Ordinance (Cap. 615), and Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Authorized Institutions), as well as the Code of Banking Practice and their own business strategies.
According to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance and related Guideline, banks are required to identify and take reasonable measures to verify the identity of the beneficial owner of corporate customers so that the bank is satisfied that it knows who the beneficial owner is, including measures to enable the bank to understand the ownership and control structure of the corporate customer. A beneficial owner normally refers to a natural person who ultimately owns or controls the corporate customers.
Following the principle of a risk-based approach, banks should differentiate the risks of individual customers within a particular segment or grouping by looking not only at country risk but at a range of factors including business risk, product risk and delivery channel risk. It is inappropriate to adopt a one-size-fits-all approach when looking at the risks a customer may present and banks are expected not to take decisions that are discriminating, disproportionate or unreasonable.
Either a customer or a bank may close an account at any time subject to any specific terms and conditions that may apply. However, according to the Code of Banking Practice, a bank should give at least 30 days’ notice or, upon the customer’s request and where practicable, a longer period of notice to the customer before closing an account, except under exceptional circumstances, for example, where the account is being used or is suspected of being used for illegal activities. The bank should, where appropriate and not against the law, also consider providing a reason to the customer for closing the account.
According to the Code of Banking Practice, a bank should provide account statements to a customer at monthly intervals unless, (a) a passbook or other record of transactions is provided; (b) there has been no transaction on the account since the last statement; or (c) otherwise agreed with the customers.
According to the Code of Banking Practice, banks should give customers 30 days’ notice before any variation of the terms and conditions which affects fees and charges, and the liabilities or obligations of customers takes effect. For all other variations, banks should give customers reasonable notice before such variation takes effect.
It is banks’ commercial decision on whether or not to apply fees and charges on their banking services, and if so, the level of such fees and charges. Nonetheless, according to the Code of Banking Practice, banks should make readily available to customers details of the fees and charges payable in connection with banking services provided.
It is banks’ commercial decision on whether or not to apply charges on dormant accounts. Nonetheless, according to the Code of Banking Practice, banks should give 14 days’ prior notice to customers when a charge accrues on dormant accounts for the first time, and advise them of what can be done to avoid such charges or where they can obtain such information. The HKMA always encourages banks to consider the public need for banking services while operating on commercial principles. All the retail banks which previously charged dormant account fee have abolished the fee.
The level of fees and charges on banking services is banks’ commercial decision. However, according to the Code of Banking Practice, banks should give at least 30 days’ notice to affected customers before any changes in the level of fees and charges (including any change in the basis on which fees and charges are determined) take effect, unless such changes are not within their control. These requirements aim to provide customers with adequate information which enables them to make informed decisions in selecting banking services most suitable for them.
It is banks’ commercial decision on whether or not to implement minimum balance requirement on customers’ accounts and levy charges on accounts with balance falling below the minimum balance requirement. However, according to the Code of Banking Practice, banks should make readily available to customers information on the minimum balance requirement and the charges payable if the account balance falls below the requirement. The HKMA always encourages banks to consider the public need for banking services while operating on commercial principles. All retails banks exempt vulnerable customers from low-balance fees. Virtual banks are required not to impose minimum balance requirements or low balance fees on customers. You can contact your bank for details.
It is banks’ commercial decision on whether or not to open a branch in a district. Nonetheless, the HKMA always encourages banks to consider the public need for banking services while operating on commercial principles.
The HKMA does not accept banks to make the purchase of wealth management investment or insurance products or having a large amount of initial deposits as a condition for opening a bank account, or link these activities with the chance of success or processing time of opening of bank accounts.
If your application for an account is rejected by a bank, you are entitled to directly requesting the bank to re-examine your application under the bank’s review mechanism. For contact details of banks’ review mechanisms, you may refer to the “What if the application is rejected?” page in the HKMA webpage. You can assist the bank’s review by providing more information. You may also wish to consider approaching other banks for account opening. The contact details of a list of retail banks in Hong Kong and the general information and documentation requirements for opening accounts with them can be found on the HKMA’s webpage.
Under the AML Guideline which was revised in October 2018, banks are only required to collect the address information of the customers. For the avoidance of doubt, a bank may, under certain circumstances, require verification (on top of collection) of residential address from a customer for other purposes (e.g. group requirements, other local or overseas legal and regulatory requirements). In such circumstances, the bank should communicate clearly to the customer the reasons of requiring verification of address.
AEOI stands for Automatic Exchange of Financial Account Information. It refers to the automatic exchange of financial account information in tax matters, aiming at improving transparency in the fight against tax evasion and in so doing protecting the integrity of the tax systems of the participating jurisdictions. In Hong Kong, the relevant legislative framework for implementation of AEOI is laid down in the Inland Revenue Ordinance.
In view of the implementation of the AEOI arrangement in Hong Kong, which also affects bank customers, the HKMA has worked with and guided the banking industry in developing an AEOI Fact Sheet which aims at addressing likely questions that bank customers may raise. The Hong Kong Association of Banks (HKAB) and the Private Wealth Management Association (PWMA) have published on their respective websites the AEOI Fact Sheet developed by the banking industry. The contents of the Fact Sheet are for general reference purposes. Relevant hyperlinks to HKAB’s and PWMA’s websites are as follows.
If you wish to learn more about AEOI, you may also refer to the following webpages providing general information on the subject:
FATCA is a United States (US) legislation that aims at combatting tax evasion by US persons holding accounts and other financial assets outside the US. In view of this new development which also affects bank customers, the Hong Kong Monetary Authority has worked with the Hong Kong Association of Banks (HKAB) to enhance the industry association’s previous efforts in developing a FATCA fact sheet. You may visit the following webpage to view the updated FATCA fact sheet developed by HKAB. The contents of the FATCA fact sheet are for general reference purposes.
If you wish to learn more about FATCA, you may also refer to the following webpages providing general information on the subject:
As an international financial centre, Hong Kong attaches great importance to safeguarding the integrity of its financial systems by implementing Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regime which meets international standards.
The banking sector, as a gatekeeper of the financial system, plays an important role in that regime. The HKMA has developed relevant policies and provided guidance to banks in establishing AML/CFT Systems, which includes preventive measures such as customer due diligence (CDD), transaction monitoring and record keeping, for identifying and appropriately mitigating ML/TF risks. When conducting CDD, banks collect information/documents from customers and reliable sources at account opening and on periodic basis thereafter to identify and verify their customers and develop an understanding of normal and expected banking activities of individual customers for ongoing monitoring of any abuse of banking services or illicit fund flows.
Customers can contribute to the efforts in the fight against crime by providing accurate and up-to-date information upon request by banks. Such cooperation will not only help banks in meeting their legal and regulatory obligations and safeguarding the integrity of the financial system in Hong Kong, but also help protect bank customers from becoming the victims of fraud and other criminal activities.
Banks adopt a risk-based approach in conducting AML/CFT work, which recognises that risks of different customers and different banking services are different, and thus CDD and risk mitigating measures adopted by banks should be proportionate to the risk level and not to bring undue burden on the customers. More information can be found on the FAQs Section about Account Opening and Operation.
The HKMA is the government authority responsible for promoting the general stability and effective working of the banking system. The HKMA supervises licensed banks, restricted licence banks and deposit-taking companies (collectively referred to as banks). The HKMA expects banks to take reasonable steps to handle complaints fairly, consistently and promptly.
Legitimate public complaints assist the HKMA in identifying issues of supervisory or enforcement concern that require follow-up action, including initiating an investigation and taking supervisory and enforcement actions.
Please note, however, that the HKMA cannot interfere with a bank’s commercial decisions, adjudicate or intervene in service quality issues or a dispute between a bank and its customer, or order a bank to pay compensation.
You are encouraged to make a formal complaint to the bank first in order to give it a chance to resolve the issues at an early stage. Many complaints arise from a misunderstanding or a mismatch of expectations and they can often be resolved after proper communication with the bank.
Each bank has designated an officer to handle complaints. You can find the contact details of these officers on the “List of banks’ contact persons for handling customer complaints” on the HKMA website. Simply contacting a customer service representative of the bank may not be sufficient for the purpose of complaint lodging and handling.
The HKMA’s focus is on whether the bank has handled your complaint properly and addressed your concerns, while in parallel, monitoring any potential breach of relevant regulatory requirements.
You may consider filing a complaint with the HKMA when:
The HKMA does not have the power to order banks to pay compensation.
If your complaint is about a monetary dispute, you may consider using the mediation and arbitration services provided by the Financial Dispute Resolution Centre (FDRC). The FDRC provides financial consumers with an independent and affordable avenue, as an alternative to litigation, for resolving some monetary disputes with financial institutions.
You can visit the FDRC website at www.fdrc.org.hk or call its hotline at 3199 5199 to find out more.
You can also consult a lawyer about your dispute.
You have to complete the online complaint form or download and complete the form in PDF format. Please fill out the complaint form as thoroughly and accurately as possible and return it to the HKMA, together with relevant information (including the responses of the bank to your complaint lodged with it) if any, through online submission, or by email, fax or post. This is necessary to enable the HKMA to handle your complaint promptly by informing us of what your complaint is about and giving us the necessary consent to handle your complaint. Please note that the HKMA may need to disclose the information you have given to us (including your personal data when necessary) to the bank and other third parties for purposes related to the handling of your complaint.
To avoid any misunderstanding, the HKMA requires that you fill out our complaint form and provide it to the HKMA.
The HKMA will not complete a complaint form for complainants.
Under special circumstances where persons with disability are not able to fill out the complaint form without assistance, the HKMA will provide special assistance. Please call 2878 1378 for an appointment at our office. An HKMA staff member will meet with the person with disability and provide assistance to complete the complaint form.
When a duly completed complaint form is submitted online, an acknowledgement email, which provides a case reference number, will be generated by the system. The HKMA will then send a preliminary response within 10 working days, advising whether the HKMA will take up your complaint.
If the complaint form is incomplete, the HKMA may contact you to obtain the missing information. An incomplete complaint form may affect our handling of your complaint.
After the HKMA takes up a complaint, we will review all relevant information available. Generally, as part of the HKMA’s complaint handling, if the case involves business relationship and/or contractual agreements between you and the bank concerned, we may refer your complaint to the bank for its further review, including where you may have already made a formal complaint to the bank earlier. The HKMA will ask the bank to provide you with a detailed reply within 30 calendar days* in response to your allegations. The bank is also required to send to the HKMA a copy of its reply to your complaint for the HKMA’s review.
We may also obtain further information from the bank in relation to your complaint.
The flowchart at the “Complaints about Banks” section on the HKMA’s website may help you understand how the HKMA handles complaints.
* Up to 60 calendar days is allowed for more complicated cases. However, the bank should provide you with an interim reply within 30 calendar days explaining why a longer period is required.
If you are not satisfied with the bank’s reply to you, you may contact the HKMA in writing, setting out the reasons why you think the bank’s reply has not adequately addressed your complaint. Depending on any new or additional information, we may ask the bank to review the case and/or give you a further reply.
The HKMA will review the bank’s reply, and if the HKMA considers that the bank has not adequately addressed your concerns in its final reply, the HKMA may require the bank to give you a further reply.
Not all complaints will lead to supervisory or enforcement actions. If in the course of complaint handling, the HKMA identifies supervisory or enforcement concerns, we will follow up with the bank concerned or initiate an investigation. The HKMA may take enforcement action where there are sufficient grounds for doing so. Where appropriate, the HKMA may also refer the complaint to the relevant regulators or enforcement agencies to consider appropriate action.
In any event, we will let you know in writing in due course the outcome of HKMA’s handling of your complaint. If the complaint handling process cannot for any reason be completed within a short period of time, we will give you a brief update on the progress every six months. We will endeavour to explain relevant considerations in relation to the outcome of the HKMA’s handling of your complaint case. However, please note that the HKMA and its staff are subject to secrecy obligations under the Banking Ordinance with respect to information obtained in the course of exercising the HKMA’s functions. For this reason, the HKMA cannot provide you with private information about banks (e.g. supervisory actions, investigations) obtained in the course of handling a complaint.
If you wish to provide supplementary information for your complaint, you may write to the HKMA by email or post, since written communication can help avoid misunderstanding and provide a proper and clear record for the parties involved. We will carefully consider any additional information, and once we have completed handling of your complaint, we will provide a written reply on the outcome.
Not all complaints will result in the HKMA taking supervisory or enforcement actions (e.g. if the complaint relates to a purely commercial matter or the bank has handled the complaint properly or the complaint is not substantiated in our view). The HKMA’s assessment is made on the basis of all information on hand and its decision is final. The HKMA will only consider a request for review of a case made with valid grounds (e.g. new substantial supporting information), and in such a case, you may set out such information to the HKMA in writing. The HKMA will review all relevant information provided by you and the bank concerned. We will advise you the outcome of our handling of your complaint in writing.
In any event, the HKMA’s assessment will not affect your legal rights and you can, if you wish, further pursue your complaint through other avenues, such as civil proceedings.
If a complainant persists in pursuing his/her complaint after being notified of the HKMA’s assessment decision but without providing any new and relevant supporting information/evidence, the HKMA may not respond to further correspondence from the complainant on the matter. The HKMA will give advance notification to the complainant on such arrangement and the reasons behind in writing.
The HKMA assigns staff for handling complaint cases based on operational arrangements, and each complaint will be handled in accordance with the established procedures. All relevant information available will be reviewed by the relevant staff of the HKMA in a professional manner with oversight. The HKMA’s assessment and decision are not the personal view of any of its complaint handling staff.
If you are not satisfied with the way in which the HKMA or its staff has handled your banking complaint, you may write to the Enforcement and AML Department of the HKMA (at 55/F, Two International Finance Centre, 8 Finance Street, Central, Hong Kong) specifying the reasons why you are not satisfied (e.g. delay in response, failure to observe professional standards of competence and behaviour). The HKMA will handle the matter in accordance with our established procedures and will inform you of the result. However, this review does not cover disagreement with the HKMA’s assessment decision, or the staff who recommended the decision, in respect of your complaint. The HKMA’s assessment decision is final.
If you suspect maladministration on the part of the HKMA, you may consider making a complaint to the Office of the Ombudsman, Hong Kong. Information about the role of the Ombudsman is available at www.ombudsman.hk .
You may have to bear the loss if your credit card has been used for an unauthorised transaction before you reported to the card issuing bank that your card or personal identification number (PIN) has been lost or stolen or that someone else knows the PIN. You may also be held liable for the losses if you have acted fraudulently, with gross negligence or have failed to inform the card issuing bank as soon as reasonably practicable after having found that your card has been lost or stolen. This may apply to losses caused by your failure to follow the measures which you should take to safeguard your card or PIN as advised by the card issuing bank.
Provided that you have not acted fraudulently, with gross negligence or have not otherwise failed to inform the card issuing bank as soon as reasonably practicable after having found that your card or PIN has been lost or stolen, according to the Code of Banking Practice, the maximum liability for such credit card loss should be confined to a limit specified by the card issuing bank, which should not exceed HK$500. The application of this limit is confined to loss specifically related to your credit card account and does not cover cash advances.
You should report the unauthorised transaction to the card issuing bank no later than 60 days from the statement date. According to the Code of Banking Practice, if you fail to report the unauthorised transaction within that period, the card issuing bank can reserve the right to regard the statement as conclusive and you may have to be held responsible for the unauthorised transaction.
Cardholders are responsible for examining their statements of credit card accounts and report any unauthorised or irregular transactions to the card issuing banks. Please also refer to the answer to Question C2 above.
Although banks are exempt from the interest rate restriction under the Money Lenders Ordinance (Chapter 163) according to the Code of Banking Practice, banks should not charge customers extortionate interest rates. If the annualised percentage rates (APRs) charged by them and calculated in accordance with the method set out in the relevant guidelines issued by the industry associations exceed the level which is presumed to be extortionate under the Money Lenders Ordinance (currently 36%), they should be able to justify why such high interest rate is not unreasonable or unfair. Unless justified by exceptional monetary conditions, the APRs thus calculated should not exceed the legal limit (currently 48%) as stated in the Money Lenders Ordinance.
There may be a term in your credit card contract that allows the credit card issuing bank to increase the interest rate applicable to your credit card account even if you have not missed a payment. However, your credit card issuing bank must give at least 60 days’ notice for you to tell them that you want to reject the increase in interest rate by closing your credit card account. If you opt to close your credit card account, you should be given a reasonable period to repay your balance at the existing interest rate, with a repayment method not less beneficial to you than your current repayment method.
The term “credit limit” generally refers to the maximum amount set by a card issuing bank for a card-holder within which the card-holder may use the credit card to purchase goods and services on credit or obtain cash advances. Regarding credit limit assignment, please refer to Section 4.6 of the Supervisory Policy Manual module CR-S-5 "Credit card business" for details.
Card issuing banks should not grant credit card limit exceeding HK$10,000 (applicable to new cards only) to students in an institution of higher education, unless the student has submitted a written application with financial information demonstrating his/her independent ability to repay the proposed extension of credit.
The credit card DDAs in connection with contracts entered into with merchants are given directly to the merchants (and not to the credit card issuing bank). Accordingly, a request for cancellation of a DDA should be made to the merchant. You can give the merchant a written instruction to cancel the authorization. If the DDA is still not cancelled, you can provide a copy of the cancellation instruction to your credit card issuing bank, and seek its help to contact the merchant to seek reimbursement of the disputed charge and / or cancellation of the authorisation in dispute (as the case may be).
Generally speaking, where consumers use credit cards to make lump-sum payments for goods and services and have disputes over the transactions later on (e.g. the service purchased is not available as the merchant has gone out of business, the goods purchased do not match the description, etc.), consumers can request for refunds of their payment through the credit card chargeback mechanisms of the respective credit card associations.
Consumers may apply to their card issuing banks to raise chargeback (i.e. refund) requests against the disputed transactions. After obtaining the details of the disputed transactions from consumers, the card issuing banks will, through the credit card associations and in accordance with their rules and criteria, raise disputes and chargeback requests for the consumers against the relevant transactions to the merchant acquirers. Consumers may check with the card issuers about application procedures for raising chargeback requests and the chargeback processes of respective credit card associations. The general (simplified) process flow of the chargeback mechanism is shown in the attached diagram.
Diagram: General (simplified) process flow of the chargeback mechanism
Notes (5-8): A merchant acquirer or a merchant may, in accordance with the rules of the respective credit card association, accept or reject a chargeback request. Where the merchant acquirer or the merchant rejects the chargeback request but the card issuing bank or consumer does not agree with the decision, the card issuing bank may in accordance with the rules of the respective credit card association submit the disputed transaction to the credit card association for arbitration.
Consumers should note that, chargeback requests raised by card issuing banks on customers’ behalf are subject to the rules of the respective card associations (including the chargeback time limits within which consumers must file the requests, information showing a dispute is valid, etc.). Chargeback requests which do not fulfil the relevant requirements may be rejected. Consumers can visit the webpages of card issuing banks for relevant information or directly contact the card issuing banks to understand the details of chargeback protection and the relevant rules that may apply to a specific credit card transaction.
Under the Code of Banking Practice, card issuing banks are required to disclose terms and conditions in a reasonable layout and font size that is readily readable. Annualised percentage rates for purchases and cash advances and fees and charges should be disclosed prominently and conspicuously and in a font size that is sufficiently larger than that for the other terms and conditions.
In general, if customers do not repay the balance in full on or before the payment due date, they will lose the "interest-free" grace period (note: for some card issuers, the "interest-free" grace period is only applicable to retail purchases but not cash advance). This means that they will be immediately subject to interests on the unpaid portion of the balance as well as any new transactions: interest on the unpaid portion of the balance will be charged from the previous statement date to the current statement date, while interest on any new transactions will be charged from the transaction / posting date of the transaction to the current statement date. Even though the customers subsequently repay the "balance" as stated on the statement in full (including the interests charged for the current billing cycle), some card issuers will still charge the customers interest in the next billing cycle: interest on the full "balance" calculated from the statement date to the date the customers repaid the "balance" in full. Each credit card issuing bank may have a slightly different approach in calculating credit card interest rates. You can call up your credit card issuing bank to understand how the interest on your credit card is calculated and ask them for the exact dollar amount you should repay on the payment due date (or earlier) in order to fully settle your outstanding balance.
According to the Code of Banking Practice (CoBP), banks should require their debt collection agencies not to employ harassment or improper debt collection tactics.
If you find the tactics used by the debt collection agency not in line with requirements as specified in the CoBP, you can make a complaint to the bank (see list of banks’ contact persons for handling customer complaints). If you are not satisfied with the manner in which the bank handles your complaint, you may seek help from our Complaint Processing Centre (see FAQs - Complaints About Banks).
According to the Code of Banking Practice, banks should require their debt collection agencies to act within the law and observe a strict duty of confidentiality in respect of customer information.
According to the Code of Banking Practice, banks and their debt collection agencies should not try to recover debts, directly or indirectly, from third parties including referees, family members or friends of the debtors if these persons have not entered into a formal contractual agreement with the banks to guarantee the liabilities of the debtors.
Yes. According to the Code of Banking Practice, banks should give the customer advance written notice (sent to the last known address of the customer) of their intention to commission a debt collection agency to collect an overdue amount owed to the bank. The written notice should include the following information: -
Banks intending to use debt collection agencies should specify in the terms and conditions of credit or credit card facilities that they may employ third party agencies to collect overdue amounts owed by the customers. Banks which reserve the right to require customers to indemnify them, in whole or in part, for the costs and expenses they incur in the debt recovery process should include a warning clause to that effect in the terms and conditions.
According to the Code of Banking Practice, banks should not engage more than one debt collection agency to pursue the same debt in one jurisdiction at the same time.
Generally speaking, the right of banks to take recovery measures depends on their contractual agreements with borrowers.
Please note that the above information shall not constitute a legal advice from the HKMA. You are suggested to consult your legal advisor as deemed appropriate.
The DPS protection limit is HK$500,000 per depositor per Scheme member. A depositor’s deposits in separate accounts with a Scheme member will be aggregated for calculating the protected deposit amount.
All licensed banks (unless exempted) are members of the DPS and must display the membership sign prominently at their places of business.
Conventional deposits with Scheme members denominated in any currency (e.g. deposits in savings and current accounts, and time deposits with a term not more than five years) are protected by the DPS, whether they are held by an individual or a company. Secured deposits are also covered. However, structured deposits, time deposits with an original maturity exceeding five years, bearer instruments, offshore deposits and non-deposit products are not protected by the DPS.
To find out more about the DPS, please visit the website of the Hong Kong Deposit Protection Board (the Board) (http://www.dps.org.hk) or contact the Board (Tel: (852) 1831 831; E-mail: firstname.lastname@example.org).
Banks in Hong Kong are required to have in place adequate security controls over their Internet banking services. According to SPM TM-E-1 on “Risk Management of E-banking” issued by the HKMA in 2015, one of the important security measures is that banks are required to notify their customers immediately via an effective alternative channel such as SMS message after completing an online high-risk transaction, and the notification message should contain the transaction details.
This notification mechanism is aimed at facilitating the customers in detecting any suspected unauthorised transactions so that they could report them to their bank immediately for prompt actions e.g. suspending the funds from being transferred to overseas account (where possible). Notification through SMS messages is considered to be more timely and effective. As such, banks in general will require their customers to provide their mobile phone numbers to the banks if the customers choose to enroll in Internet banking services for conducting high-risk transactions.
Alternatively, if customers choose not to provide mobile phone numbers to the banks, the customers could still conduct the high-risk transactions through other channels such as at branches or by post (where appropriate).
Further information and advice on Internet banking safety may be found on the “Smart Consumers” webpage.
According to the Supervisory Policy Manual on General Principles for Technology Risk Management and related circulars issued by the HKMA, banks are required to implement adequate IT controls to ensure confidentiality and integrity of information, and to protect the information in accordance with the level of risk present and envisaged. In particular, banks are required to protect confidentiality of customer data. Some of the banks may require their customers to log in their Internet banking accounts to access the monthly e-statements. The customer login process at Internet banking can be used as a way to authenticate the identity of the customer, and therefore protecting the customer information (including e-statements) stored at the bank’s systems.
The HKMA adheres great importance to data security particularly customer data protection and will continue to work with the banking industry to monitor the developments and trend of technology and information security, and strengthen the security measures, where appropriate, to protect the integrity and confidentiality of customer information.
Further information and advice on Internet banking safety may be found on the “Smart Consumers” webpage.
The HKMA's supervisory objective is to establish and maintain a safe and sound environment for the development of e-banking in Hong Kong without standing in the way of progress. The HKMA believes that maintaining technology neutrality is crucial for allowing banks to have the flexibility to choose and implement technologies that are appropriate to their e-banking services. Nevertheless, banks are required to adhere to the "fit for purpose" principle when implementing the system i.e. the technical implementation of the security measures and other controls adopted by banks for their electronic banking systems is required to be commensurate with the risks associated with the types and amounts of transactions allowed, the electronic delivery channels adopted and the risk management systems of individual banks.
As such, in respect of two-factor authentication, banks are required to select reliable and effective authentication techniques to authenticate the identity and authority of their e-banking customers. In general, banks are required to employ stronger customer authentication for authenticating their customers' transactions with higher risk. Banks need to evaluate carefully other aspects, including whether a particular authentication method is sufficiently mature.
Banks are expected to continue to review their security measures in place and to enhance the controls where appropriate on an ongoing basis, taking into account the trend and development of e-banking and information security.
Further information and advice on Internet banking safety may be found on the “Smart Consumers” webpage.
Internet banking services in Hong Kong are safe to use so long as both the banks and the customers have taken appropriate precautionary measures. Bank customers should stay vigilant to potential security issues e.g. computer virus, Trojan Horse attacks on their personal computers and mobile devices. Customers should install security software in their personal computers and mobile devices and keep them up-to-date. They should also avoid visiting or downloading software from suspicious websites, and be wary of opening attachments in e-mails from unfamiliar sources. Bank customers who discover any suspicious webpage or any unauthorised transactions in their bank accounts should contact their banks immediately. Further information and advice on Internet banking safety may be found on the “Smart Consumers” webpage and on the websites of banks.
According to Article 112 of the Basic Law, "No foreign exchange control policies shall be applied in the Hong Kong Special Administrative Region. The Hong Kong dollar shall be freely convertible. Markets for foreign exchange, gold, securities, futures and the like shall continue. The Government of the Hong Kong Special Administrative Region shall safeguard the free flow of capital within, into and out of the Region." It means that there is no restriction on money transfer in Hong Kong and the HKMA does not impose charges of any kind on money transfer.
We suspect that you have encountered a fraud case. The HKMA is the banking regulator in Hong Kong and we have no relationship with any kind of lottery activity.
In addition, according to Article 112 of the Basic Law, "No foreign exchange control policies shall be applied in the Hong Kong Special Administrative Region. The Hong Kong dollar shall be freely convertible. Markets for foreign exchange, gold, securities, futures and the like shall continue. The Government of the Hong Kong Special Administrative Region shall safeguard the free flow of capital within, into and out of the Region." It means that there is no restriction on transfer of money in Hong Kong and the government does not demand for any kind of charges on money transfer.
If you suspect that fraudulent activities are involved, you may wish to report the case to the local police station or the Commercial Crime Bureau of the Hong Kong Police Force direct.
If you receive any suspicious messages or identify any suspicious websites that purport to be related to banks, please contact the bank concerned and the police (either a local police station or the Commercial Crime Bureau) to report your case.
When making a fund transfer, a bank customer or SVF user should take great care and verify the accuracy of the inputted transferee’s account number and amount of funds to avoid mis-transfer of funds.
The guideline is applicable to cases where bank customers or SVF users have mis-transferred funds to unintended parties via any fund transfer channels, including ATMs, phone banking, online banking, mobile banking and bank branches, whether within the same bank, between different banks, across a bank and an SVF operator, within the same SVF operator and between different SVF operators in Hong Kong.
If a bank customer or SVF user has made a mis-transfer of funds, he/she should seek assistance promptly from his/her bank or SVF operator. The bank or SVF operator will request him/her to provide details about the mis-transfer to facilitate its communication with the transferee institution, which will in turn contact the transferee. Upon receiving the report of a mis-transfer, the bank or SVF operator concerned will follow the aforementioned handling procedures, including providing a written response to the transferor, detailing the date(s) of communication between the transferee institution and the transferee, actions taken and the outcomes. In case the transferee does not return the mis-transferred funds, the written response will be helpful to the transferor in reporting to the Police or considering taking further action as needed. Such handling procedures also require the transferee institution to remind the transferee that he/she may be held criminally liable if the mis-transferred funds are not returned.
If one receives some funds that have been mis-transferred to his/her own bank account or SVF account, he/she should report it promptly to his/her bank or SVF operator and arrange to return the funds via his/her bank or SVF operator. Otherwise, he/she may be held criminally liable.
If you suspect that a bank/SVF operator is not handling your data properly, generally, you should raise your concern with the bank/SVF operator first. If you are dissatisfied with their response, you can lodge a complaint with the Office of the Privacy Commissioner for Personal Data (PCPD). You can visit PCPD’s website to learn more about their complaint handling policy and procedures.
Yes, according to the Code of Banking Practice, banks are required to treat their customers’ (and former customers’) banking affairs as private and confidential. Banks should at all times comply with the Personal Data (Privacy) Ordinance (Chapter 486) (PDPO) in the collection, use, holding and erasure of customer information. They should also comply with any relevant codes of practice issued or approved by the Privacy Commissioner for Personal Data giving practical guidance on compliance with the PDPO. As for SVF operators, according to Practice Note on Supervision of SVF Licensees they should set out clearly their personal data policies and practices in a manner that can fulfil the requirement under the PDPO as well as any relevant codes of practice, guidelines or best practice issued by the Office of the Privacy Commissioner for Personal Data from time to time.
The Office of the Privacy Commissioner for Personal Data is a statutory body entrusted with the task of protecting personal data privacy of individuals and to ensure compliance with the Personal Data (Privacy) Ordinance (Chapter 486) in Hong Kong. You can learn more from its website.
In general terms, an APR is a reference rate which includes the interest rate and other fees and charges (such as handling charges and service charges) of a banking product (such as credit cards and personal loans) expressed as an annualised rate. The Code of Banking Practice requires banks to, where relevant, quote APRs of banking products to facilitate comparison between different charging structures.
APRs are calculated using the “Net Present Value” method specified in the relevant guidelines issued by the industry associations. Banks adopt the same set of rules and assumptions to provide a consistent basis of calculation.
According to the Code of Banking Practice, banks should where relevant quote APRs of banking products. In particular, banks should, where relevant, indicate the APRs in any advertising and promotional materials for banking products which includes references to interest rates. Banks should also be prepared to respond to your inquiries concerning APRs and the methods of calculation.
Although banks are exempt from the interest rate restriction under Money Lenders Ordinance (Chapter 163), according to the Code of Banking Practice, banks should not charge customers extortionate interest rates. If the APRs charged by them and calculated in accordance with the method set out in the relevant guidelines issued by the industry associations exceed the level which is presumed to be extortionate under the Money Lenders Ordinance (currently 48%), they should be able to justify why such high interest is not unreasonable or unfair. Unless justified by exceptional monetary conditions, the APRs thus calculated should not exceed the legal limit (currently 60%) as stated in the Money Lenders Ordinance.
According to the Code of Banking Practice, a bank should be prepared to answer your queries relating to the terms and conditions of banking products. A bank should also provide the basis on which the interest rate of your loan is determined upon your application for the loan or in a subsequent offer.
You may wish to refer to Section 6: Exchange rates and interest rates of the Monthly Statistical Bulletin.
The Securities and Futures Commission, as the lead regulator of the securities market, is responsible for setting the standards, through rules, codes and guidelines issued under the Securities and Futures Ordinance; while the HKMA acts as the frontline supervisor of the securities business of banks and ensures that banks and their staff conduct the sale of investment products in accordance with the relevant regulatory requirements and standards.
The HKMA is responsible for the day-to-day supervision of banks’ securities activities. The supervisory approach includes issuing circulars and guidelines, conducting regular on-site examinations to check banks’ compliance, and performing off-site surveillance such as analysing the results of periodic returns and surveys submitted by banks.
The Securities and Futures Commission sets out the principles and minimum regulatory requirements for all intermediaries (including banks and brokers). The HKMA, being the frontline supervisor of banks’ conduct in relation to the sale of investment products, may impose enhanced measures or provide guidance on the expected standards to strike a proper balance between protection of bank customers and a user-friendly customer experience, taking into account market developments, supervisory observations, nature of the banks’ clientele and mode of operations.
Having regard to market developments and the growing public expectations for better protection of retail banking customers, the HKMA has required retail banks to implement a number of investor protection measures for retail banking customers, including the following:
In view of the differences in nature of clientele and mode of operations of private banking business, the HKMA allows flexibility for the private banking industry to comply with regulatory requirements and standards governing sale of investment products whilst according protection to investors.
Apart from enquiring the bank and / or its staff directly, a customer may also check against the online public registers maintained by the regulators to ascertain whether a bank is a “registered institution” (i.e. a bank which is registered to carry out regulated activities under the Securities and Futures Ordinance) as well as eligibility and other particulars of its staff who are registered as “relevant individuals” (i.e. individuals who are registered to carry out regulated activities under the Securities and Futures Ordinance).
Banks should properly disclose and explain the key features and risks of the investment products, including the name of the product issuer, and any fees and charges applicable to customers, to help customers understand the associated risks and costs before investing in the products.
When selling funds, investment-linked assurance schemes and unlisted structured investment products to the public in Hong Kong, banks are required to provide customers with Product Key Facts Statements which summarise the key features and risks of a product. For currency-linked instruments and interest rate-linked instruments issued by banks, banks should provide Important Facts Statements to retail banking customers purchasing these products.
Banks should also provide customers with a copy of the rationale for their investment solicitations or recommendations upon customers’ request.
For sale of investment products to vulnerable customers, banks should implement additional precautionary measures such as the following:
Regarding the sale of (i) derivative products (excluding investment funds) that are not listed on an exchange in Hong Kong; or (ii) debentures that are not listed on an exchange in Hong Kong and have any of the following features (extendable, with loss-absorption feature, exchangeable, and/or convertible), banks should give inexperienced customers who are elderly or with high asset concentration a pre-investment cooling-off period (i.e. at least two calendar days) to understand the products, consider the appropriateness of the investment, and if necessary, consult family members and friends before placing an order.
No, the Pre-Investment Cooling-off Period (PICOP) arrangement is applicable only to the sale of derivative products (excluding investment funds) that are not listed on an exchange in Hong Kong and debentures that are not listed on an exchange in Hong Kong and have any of the following features (extendable, with loss-absorption feature, exchangeable and/or convertible).
Under the PICOP arrangement, banks are required to give inexperienced customers who are elderly or with high asset concentration, at least two calendar days to understand the products, consider the appropriateness of the investment, and if necessary, consult family members and friends before order placement. For details, you may refer to section (A)(II.6) of the circular "Investor Protection Measures in respect of Investment, Insurance and Mandatory Provident Fund Products" issued by the HKMA to banks on 25 September 2019.
No. In determining whether a customer is a vulnerable customer, banks are required to consider holistically the circumstances of a customer to assess the degree of riskiness or vulnerability that a customer may not be able to understand the risk and withstand the potential losses of an investment, including the level of financial sophistication (e.g. investment experience), the state of mind (e.g. ability to make investment decision) and the level of wealth.
In order to ensure investment recommendations or a complex product(s) are suitable for you, banks are required to seek and take into consideration your relevant information including investment objectives, investment experience and knowledge, financial situation, investment horizon and risk tolerance, etc. A common way to collect and document such information is by conducting a customer risk profile assessment generally in the form of questionnaire. If disclosure by you is limited and as a result the bank is unable to make that assessment properly, this would result in limitation of the bank’s service that could be provided to you. It is therefore important that bank customers should provide accurate and up-to-date information for banks to ensure the suitability of investment recommendation or solicitation, or a complex product(s) is reasonable in all the circumstances.
You do not need to complete a risk profile assessment before conducting each and every transaction. If you have already completed an assessment with the bank before and the results are still valid (validity usually lasts for one to two years depending on different banks’ policies), the bank can proceed to recommend suitable investment product(s) or assess whether a complex product is suitable to you without carrying out risk profile assessment again. If you have significant changes in relevant information, you should inform the bank as soon as possible so as to update your risk profile assessment.
Audio-recording is an important investor protection measure. Audio-recording the risk profile assessment and the selling process can help ensure such processes are properly conducted (e.g. to guard against misrepresentation or omission in the profiling and risk disclosure processes). The audio record can also serve as important evidence in any customer complaints or disputes, and can facilitate regulators’ supervision of the business conduct and investigation of any customer complaints.
Not every risk profile assessment nor every purchase of an investment product requires audio-recording. While banks are required to audio-record the first-time face-to-face risk profile assessment process for retail banking customers, banks may provide other risk profiling channels, such as online assessment where audio-recording is not required. Also, banks may conduct subsequent regular review of customer risk profile online or via written confirmation with customers, where audio-recording is not applicable.
In general, banks do not need to audio-record face-to-face selling process of investment products for retail banking customers, unless the process involves complex products (e.g. complex bonds, and investment products with derivatives), or recommendation or solicitation of risk-mismatched simple products.
A bank may recommend a customer to buy an investment product with risk-mismatch, if it is suitable to the customer. For example, it may be suitable for a customer with a low or medium risk profile to buy a high risk investment product if the product only constitutes a small portion of the customer’s portfolio and could likely meet the investment objectives and other circumstances of the customer.
Where a bank advises or alerts you that an investment product is unsuitable for you, you should think twice on whether to purchase the product.
In general, a bank can execute an investor’s purchase order for a specific simple product without involving investment recommendation or solicitation from the bank.
If an investor’s purchase order involves a complex product (other than certain exchange-traded derivative products or non-leveraged currency-linked or interest rate-linked deposits with standardised features), a bank is required to ensure that (i) the product is suitable for the investor in all circumstances before executing the order, irrespective of whether there is solicitation or recommendation from the bank; (ii) provide sufficient information on the key nature, features and risks of the product to enable the investor to understand the product before making an investment decision; and (iii) provide prominent and clear warning statement(s) to the investor about the complex product.
Besides, if such complex product involves derivatives or is a debenture with special features, the bank may also need to apply pre-investment cooling-off period arrangement for the investor. Further, for derivative products or leveraged transactions, the bank would need to assure itself that the investor understands the nature and risks of the products and has sufficient net worth to be able to assume the risks and bear the potential losses of trading in such products.
Banks are required to make adequate disclosure of relevant material information to help customers make informed investment decisions.
The objective of risk disclosure is to enable a customer to understand the investment product before entering into a transaction. Banks may adopt a risk-based approach, having regard to the circumstances, such as the customer’s trading pattern, level of sophistication and investment experience, as well as the product’s complexity and risk, in providing risk disclosure to customers.
For example, a bank can streamline risk disclosure to a customer when conducting subsequent transactions of an investment product comparable to the investment product for which risk disclosure has already been conducted previously by the bank and the bank assures itself that the customer understands the product.
Banks and their staff are not required to be registered prior to selling currency-linked / interest rate-linked investment products issued by banks (“CLILs”) as such products are not regulated under the Securities and Futures Ordinance (“SFO”), yet the HKMA generally expects banks to follow similar standards as those applicable to SFO-regulated investment products when selling CLILs. In particular, if the sale of CLILs involves solicitation or recommendation, or the concerned CLIL is having a complex structure, banks should ensure suitability of the transaction, give proper disclosure of product features and risks, and ensure that marketing materials are clear, fair, and present a balanced picture.
In addition, a number of enhanced investor protection measures implemented by the HKMA are applicable to banks selling CLILs to retail banking customers. For example, banks are required to provide retail banking customers with “Important Facts Statement” which contains concise summary of the key features and risks of the CLIL in plain language; the risk profiling and face-to-face selling process for investment products with derivatives (such as CLILs with non-standardised structure) should be audio recorded; less sophisticated retail banking customers buying unlisted structured products (e.g. CLILs) should be entitled to a pre-investment cooling-off period of 2 calendar days.
You may contact the Investor Compensation Company Limited, a wholly-owned subsidiary of the Securities and Futures Commission established for the administration of claims by customers of intermediaries, including registered institutions and brokers, against the Investor Compensation Fund. The contact details are:
Tel: (852) 2523 7382
Fax: (852) 2523 7389
Address: 54/F, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
Only those individuals whose names are entered in the Register of Securities Staff of AIs (HKMA Register) on the HKMA's website may engage in the conduct of regulated activity(ies) of a registered institution. It is the responsibility of a registered institution to ensure that an individual is fit and proper before submitting the specified particulars to the HKMA Register for the individual to conduct regulated activity(ies) as a relevant individual. It is also the responsibility of a registered institution to remove the particulars from the HKMA Register when a relevant individual is not fit and proper or no longer conducts any regulated activity for the registered institution.
Any person who is directly responsible for supervising the conduct of any regulated activity of a registered institution is expected to be appointed as an executive officer. Executive officers must obtain written consent of the Monetary Authority. Application to become an executive officer should be made to the HKMA through the registered institution concerned.
Relevant individuals and executive officers of registered institutions are subject to the same competence requirements set out by the Securities and Futures Commission (SFC) for licensed representatives and responsible officers of licensed corporations respectively. The competence requirements are detailed in the Guidelines on Competence issued by the SFC. In addition, a relevant individual or an executive officer must have met the fitness and properness standards laid down in the Fit and Proper Guidelines issued by the SFC.
To access the Guidelines on Competence and the Fit and Proper Guidelines, please visit the SFC's website.
In general, if you were registered as a relevant individual of a registered institution before and seek to re-register within 3 years from the date of your last registration, you do not have to take any licensing examination if you seek to engage in the same regulated activity (or other regulated activity with the same competence requirements) and in the same role (as a relevant individual or as an executive officer) as you were last registered.
If you have left the industry for between 3 and 8 years and now seek to be engaged by a registered institution as a relevant individual for the same regulated activity (or another regulated activity having the same competence requirements) and in the same role as before, you may be exempted from licensing examinations (including the recognised industry qualifications and the local regulatory framework paper requirements) provided that you have completed five Continuous Professional Training (CPT) hours per regulated activity for each year of absence from the industry (where local regulatory training must make up at least 50% of the CPT activities).
For details about exemptions from licensing examinations for a relevant individual and the criteria for exemption (which are the same as a licensed representative), you may refer to the Guidelines on Competence posted on the Securities and Futures Commission’s website (including paragraph 4.4.4 for re-entrant exemption).
You may refer to paragraph 4.3.1 of the Guidelines on Competence posted on the Securities and Futures Commission’s website for the different options of competence requirements applicable to a relevant individual (which are the same as a licensed representative). Recognised industry qualification requirement, for example, HKSI LE Papers 7 and 8 for Types 1 or/and 4 regulated activities, is not applicable to a relevant individual under Option A or Option B if you are in possession of the required relevant industry experience. Please note, however, that local regulatory framework paper, or HKSI LE Paper 1, is required under each option (unless applicable exemption requirements apply).
CPT requirements are only applicable to relevant individuals (including executive officers) of register institutions and persons licensed with the Securities and Futures Commission. You are not required to complete CPT hours if you no longer carry on regulated activities in any such roles.
The HKMA does not approve or grant exemption from CPT requirements for relevant individuals, nor does the HKMA endorse any CPT course or course provider. It is the responsibility of a registered institution to ensure that an individual is fit and proper (including meeting the CPT requirements) before submitting the specified particulars to the HKMA Register for the individual to conduct regulated activity(ies) as a relevant individual. It is also the responsibility of a registered institution to remove the particulars from the HKMA Register when a relevant individual is not fit and proper (including meeting the CPT requirements).
For details about CPT requirements, please refer to the Guidelines on Continuous Professional Training posted on the Securities and Futures Commission’s website.
Inclusion and removal of the specified particulars of relevant individuals in and from the HKMA Register are made by registered institutions through an on-line submission mechanism. If you have questions about your past or current registration shown on the HKMA Register, you should approach the registered institution concerned.
While we note your dissatisfaction in having your loan application declined by the bank, we hope you would appreciate that the HKMA is not in the position to interfere commercial decisions of individual banks, including judgment on whether or not to lend to a particular customer.
The data retention period of different types of consumer credit data that may be retained by a CRA is specified under the Code of Practice on Consumer Credit Data (the Code) issued by the Office of the Privacy Commissioner for Personal Data (PCPD). For account repayment data, the general rule on data retention is that such data may be retained by a CRA in its database for five years from the date of creation of such data or until the expiry of five years after account termination. However, there are certain exceptions. For example, if you have defaulted in repayment for a period in excess of 60 days, then such account default data may be retained until the expiry of five years after the amount in default is fully settled.
For bankruptcy record, a CRA may collect this type of information from public sources for credit reporting purposes. The Code provides that public record data relating to a declaration or discharge of bankruptcy may be retained by a CRA in its database for a period of eight years from the relevant declaration of bankruptcy.
For more information on data retention of other types of consumer credit data by a CRA, please refer to the Code. For any questions relating to the Code, please contact the PCPD direct. The contact information of the PCPD can be found on its website.
Any person can check his or her own credit record with the CRA concerned. You may wish to contact your bank to find out more information about the CRA they have used, and the contact information of the CRA.
You may make a data correction request with the CRA concerned. The CRA should handle your data correction request in accordance with the Code of Practice on Consumer Credit Data (the Code) issued by the Office of the Privacy Commissioner for Personal Data (PCPD) (clauses 3.19 and 3.20 of the Code refer).
For more information, please refer to the Code. If you have any questions about the Code, you may wish to make an enquiry with the PCPD direct. The contact information of the PCPD can be found on its website.
In accordance with the Code of Practice on Consumer Credit Data (the Code) issued by the Office of the Privacy Commissioner for Personal Data, when you have settled your loan account, you have a right to instruct your lender to make a request to the CRA concerned to delete the closed account data from its database. However, you should note that the right is conditional upon there having been, within 5 years immediately before account termination, no default in repayment for a period in excess of 60 days on the account and you have settled the account by full repayment (Clause 2.15 of the Code refers). For more information about deleting credit record from a CRA, please refer to the Code.
Generally speaking, the earlier a borrower makes loan repayment, the more outstanding interest payments are likely to be saved. Nevertheless, borrowers should consider the early repayment charges involved before deciding whether to pay off their loans early or not. Borrowers need to be aware that individual banks use different ways to apportion interest and principal in the monthly repayment amounts. Even though the monthly repayment amount is the same throughout the loan tenor, more interest will, in general, be included in earlier repayments, and less on principal. In other words, where a borrower has been making repayments as scheduled for some time, the amount of outstanding interest is likely to be small. If the borrower chooses to pay off the loan early at this point of time, the loss may outweigh the gain as the amount of interest saved may not be enough to cover the relevant charges for early repayment. As a smart bank customer, one should first check with the bank about the total amount involved in early repayment (including outstanding loan balance, early repayment charges and other fees, etc.) and the amount of outstanding interest. He/she should then compare different scenarios and consider carefully before making a decision of repaying early or not.
In general, it is the commercial decision of banks on whether and how much they will lend to borrowers. In making the decision, banks will consider a host of factors, such as repayment ability of the borrowers and any risk mitigating arrangements.
However, in the case where the lending activities engaged by banks could pose major prudential concern or significantly impact banking stability in Hong Kong, the HKMA will issue guidelines requiring banks to adopt prudent standards and practices to strengthen their risk management.
With regard to property mortgage loans, the HKMA has introduced several rounds of countercyclical macroprudential measures since October 2009 to enhance the resilience of banks to cope with any possible downturn in the local property market and prevent homebuyers from overstretching themselves. In introducing each round of measures, the HKMA has strived to minimise the impact on genuine end-users, particularly first-time homebuyers.
There are two common approaches adopted by banks in assessing the repayment ability of mortgage applicants:
Debt servicing ratio (DSR)-based lending – DSR is the ratio of the monthly debt obligations of mortgage applicants to their monthly income. It is usually applicable to applicants with regular income. Under this approach, banks will request applicants to provide their proof of income and evidence of indebtedness.
Net worth-based lending – this is usually applicable to applicants who could not provide regular income proof, and have to rely on their net worth to demonstrate their repayment ability. Under this approach, banks will request applicants to provide evidence of their net assets and indebtedness.
The purpose of “positive mortgage data sharing” is to enhance credit assessment of banks to facilitate prudent lending and more effective credit risk management by credit providers, thereby preventing over-borrowing by consumers and over-lending by credit providers. This is conducive to the general stability of the banking system in Hong Kong, which is crucial to the interest of depositors as well as the financial stability of Hong Kong as a whole.
The HKMA expects banks to make full use of the PMDS scheme and to verify the mortgage count declared by mortgage loan applicants with the mortgage count information obtained from the Credit Reference Agency database.
Chip-based ATM technology offers greater security and protection to the data stored within the chip and therefore reduces the risk of unauthorised ATM transactions. As many ATMs outside Hong Kong are still using magnetic stripe technology, the new chip card continues to feature a magnetic stripe to allow cardholders’ use outside Hong Kong. But enhanced security measures are implemented to offer additional protection against unauthorised ATM transactions outside Hong Kong. The overseas ATM cash withdrawal capability for all ATM cards is pre-set as “deactivated”. ATM cardholders are reminded to activate the overseas cash withdrawal capability before traveling, if they may need to withdraw cash from ATMs outside Hong Kong.
Cardholders who have not activated the overseas cash withdrawal capability of their ATM cards before leaving Hong Kong will have to resort to other means for activation before they could withdraw cash from ATMs outside Hong Kong. Cardholders can activate such capability via telephone (phone banking / call centre). A number of banks also offer additional channel(s) (e.g. Internet banking). While banks will communicate with their customers regarding the channels for activating overseas ATM cash withdrawal capability, cardholders are suggested to get in touch with their banks if in doubt.
Regarding the maximum expiry period, practices among the banks may vary, e.g. specific number of years such as one or three years, up to the expiration date of the card, or perpetual. Banks will communicate the details to their customers. Customers are reminded not to set the valid period longer than needed or to “perpetual” to avoid reducing the effectiveness of such security measure.
Yes. EBPP service provides an additional channel for you to view and pay e-Bills through one platform.
For Demand for Rates and/or Government rent, you should register on or before 5th of March, June, September or December. For Water Bill, please check your last bill for the bill issuance date. You should register 2 weeks before the issuance of your next Water Bill through EBPP service.
Yes, you can choose to receive and pay e-Bills for more than one hundred merchants and charity organisations via EBPP service. Please visit www.hkicl.com.hk for the latest list of EBPP merchants.
Yes, you should cancel the registration via your Internet banking account.
You can subscribe the EBPP service through 19 banks. Please visit www.hkicl.com.hk for the latest list of EBPP participating banks.
No, it is completely free of charge.
Yes, banks will continue to offer paper cheque as a basic banking service.
Whether to charge a bank customer or not is subject to the individual banks’ commercial decision. Nonetheless, based on our understanding, most if not all banks are prepared to offer e-Cheque service to their retail banking customers free of charge.
No, it is completely free of charge.
No, an e-Cheque must be addressed to a payee and deposited to the payee’s bank account. Besides, it cannot be exchanged for cash over the bank counter.
The public can pay the General Demand Notes and tax bills and demand notes issued by the Inland Revenue Department by e-Cheques in the initial phase. It will be gradually expanded to cover the bills issued by the other Government departments.
You can ask other trusted persons (e.g. family members) to deposit e-Cheques on your behalf through the e-Cheque Drop Box service, or refer to the information on the HKICL website, or approach your bank for assistance if necessary.
The cut-off time for e-Cheque deposit through the e-Cheque Drop Box service is 5:30p.m. of each business day for same day clearing. For e-Cheque deposit through the Internet banking, you should refer to the cut-off time specified by individual banks.
Yes, you can ask the payer to use other payment instruments (e.g. paper cheque) if you do not prefer to receive e-Cheques.
If a payee would like to receive payments with mobile number or email address, he or she has to register with the addressing service.
You may link up more than one bank or e-wallet with your mobile number, and specify one of the banks or store value facilities (SVFs) as the default bank or SVF to receive funds. In case you hold more than one account with a bank, you have to select one of the accounts to link up with the mobile number.
Banks and SVFs have defined different thresholds for various types of payment or transfers. You may contact your banks or e-wallet operators for details.
If a bank customer or SVF user has made a mis-transfer of funds, he/she should seek assistance promptly from his/her bank or SVF operator. The bank or SVF operator will request him/her to provide details about the mis-transfer to facilitate its communication with the transferee institution, which will in turn contact the transferee. You may refer to FAQs on Fund Transfer under Banking section for more details.
Please contact your banks or e-wallet operators for information on fees regarding fund transfer services.
Companies may use a QR code (displayed at point of sale or printed on bills) or other e-channels to accept payments via FPS. Please contact your banks or SVFs operators for more information.
No registration is needed. You only need to enable the QR Code scanner of your mobile banking app or e-wallet, which supports Government bill payments through FPS QR Code, and then use it to scan the FPS QR Code printed on the Government bills to make payment.
Please visit the following website for the list of banks and e-wallets that support the Government bill payments through FPS QR Code. Link: fps.hkicl.com.hk/govtpayments
No, it is free of charge.
You may check the transaction history of your bank or e-wallet. Where needed, you may contact the relevant Government departments for assistance.
To ensure you get the latest content, click the refresh or reload button on your browser. It is possible that your web browser may load your visited pages from the cache in your hard disk or in the proxy server, so that the web page you have loaded may not be the most recent. If you still cannot get the latest data, try to delete the cache memory and temporary files from the web browser. If there is a proxy server issue, please contact your Information Technology department or Internet Service Provider (ISP) for further assistance.
Some of the files available for download on the HKMA website are in PDF (Portable Document Format). To view or print a PDF file, use the Adobe Acrobat Reader, which is available for download free of charge from here.
Press "Yes" button in the prompt window to view the document.
Click here for the search tips on the HKMA website.
When you click the link on the HKMA website to open a Microsoft Powerpoint file, a pop-up window will ask you to open the file or to save it in your hard disk.
If there is no pop-up window, you need to change the configuration first by following the following steps:
To promote the development and wide adoption of Open API and provide another convenient way for public users to retrieve related information, the HKMA had made available 130 sets of information, covering all financial data and important information published on the HKMA's website, through Open API by phases since July 2018.