Legislative Council Meeting Member’s Bill – Bank of Communications (HK) Limited (Merger) Bill : 2nd & 3rd Reading

MR CHAN CHUN-YING (in Cantonese):

President, under the Banking Ordinance (Cap. 155), to implement a bank merger in Hong Kong, a legally effective way should be found to transfer the existing assets and liabilities to a new entity or to the institution which remains after the merger. Mergers involving locally-incorporated banks are normally effected by private legislation with the approval of the Legislative Council.

Members have mentioned earlier that over the past 30 years, there have been a number of bank mergers effected by way of private legislation in Hong Kong.   I am grateful to Mr Kenneth LEUNG for introducing some examples in recent years earlier on.   Also, effecting mergers by means of such a legislative instrument is an open and transparent approach which allows easy understanding by customers, third parties and the general community.

Bank of Communications (Hong Kong) Limited (“BCOM (Hong Kong)”) is a wholly-owned subsidiary of Bank of Communications incorporated in Hong Kong, and has been approved by the Hong Kong Monetary Authority to operate as a licensed bank. The Bank of Communications (Hong Kong) Limited (Merger) Bill (“the Bill”) provides for the transfer of the retail banking business and private banking business of Bank of Communications, Hong Kong Branch, to BCOM (Hong Kong), transferring the retail banking business and private banking business operated to BCOM (Hong Kong) on the appointed day. And as an independent licensed bank subject to the regulatory supervision of the Hong Kong Monetary Authority, BCOM (Hong Kong) has its own independent board of directors and its business operations and capital requirements are subject to the regulatory requirements of the Banking Ordinance in Hong Kong. The protection offered to customers transferred to BCOM (Hong Kong) will be the same as that enjoyed by customers of other locally incorporated banks.

The Bill is a Member’s Bill introduced by me. I believe the Bill is not controversial and consistent with the development trend of our banking industry and meets the policy objectives on the supervision of our banking industry.   At the working level, Bank of Communications will strive to ensure that the business operations and customers of the Bank will be disrupted to the slightest extent in the process of the merger.   Customers of the Bank are normally not required to sign new customer documentations. Bank of Communications also guarantees to retain employees who have given consent to be transferred to BCOM (Hong Kong), and the accrued benefits of these employees, such as annual leave and long service leave, will remain unchanged.

The Legislative Council Panel on Financial Affairs was consulted on the Bill at its meeting on 5 December 2016, and the Bill was published in the Gazette on 21 and 28 April 2017 respectively, followed by its First Reading at the Legislative Council meeting of 24 May 2017.  At the House Committee meeting on 26 May, it was agreed to form a Bills Committee to study the Bill.   The Bills
Committee has also held a meeting to scrutinize and endorse  the Bill. As mentioned by Members earlier on, the parts of the Bill which require amendments only concern references to the Insurance Companies Ordinance in the Bill as it has now been renamed as the Insurance Ordinance. Hence, the amendments proposed this time around seek to amend the definitions of several banking businesses  under Interpretation of the Bill, removing the references to the “Insurance Companies Ordinance”  and substituting  them with the “Insurance Ordinance”.

I am grateful to members of the relevant committees for the views put forward, so that various stages of scrutiny of the Bill may be completed.   The Bill has entered the final stage of scrutiny today.   Bank of Communications and I hope that, with the staunch support from Members, the scrutiny of the Bill and its amendments may proceed smoothly so as to complete the legislative process.
Thank you.


MR CHAN CHUN-YING (in Cantonese):

Chairman, I move the amendment to clause 2.  As the Insurance Companies Ordinance (Cap. 41) has been renamed as the Insurance Ordinance from 26 June 2017, the amendment seeks to amend
clause 2(1) of the Bill to change the “Insurance Companies Ordinance” referred to in the definitions of corporate banking business, private banking business and retail banking business to the “Insurance Ordinance”.


MR CHAN CHUN-YING (in Cantonese):

President, theBank of Communications (Hong Kong) Limited (Merger) Bill has passed through Committee with amendment.   I move that this Bill be read the Third time and do pass.