An amended bill that will enable Hong Kong to implement the revised international capital adequacy framework -- the Basel Committee on Banking Supervision -- will besubmitted to the Legislative Council (Legco) on April 6.

According to a government press release Thursday, in particular,the Banking (Amendment) Bill proposes that locally incorporated authorized institutions' capital adequacy ratio shall be calculated, and information on financial affairs shall be disclosed, in a manner according to rules the Hong Kong Monetary Authority prescribes under the Banking Ordinance.

These rules will be developed based on the Basel II requirements and have the status of subsidiary legislation.

The bill also contains proposals to enhance the operation of individual provisions of the ordinance.

They include: confining the liability of an authorized institution's manager to cases where contravention results from anact or omission on the part of the manager or of a person under his control; expressly providing that the Monetary Authority may disclose certain details of disciplinary action taken against a relevant individual who is engaged in securities business on behalf of an authorized institution, and extending the ceiling of the minimum ceiling adequacy ratio of licensed banks from 12 percent to 16 percent.

Monetary Authority's Deputy Chief Executive William Ryback saidwith greater risk sensitivity and inclusion of a wider range of risks, Basel II will strengthen the safety and stability of the banking sector, and the Bill will provide express statutory backing for its implementation in Hong Kong.

"In developing the Bill and the Basel II implementation plans, the authority has been guided by a Basel II consultation group that includes representatives from the banking industry, the accounting profession and other experts," Ryback said.

"The bill and the Basel II implementation proposals have also been the subject of full consultation with other interested parties," he said.

Ryback pledged the authority will continue to work closely withthe banking industry to ensure the implementation of the Basel II requirements in Hong Kong in accordance with the Basel timetable, by the end of 2006.

The authority plans to complete the drafting of the detailed capital rules and disclosure rules in consultation with the industry by the end of this year to help authorized institutions prepare early for the implementation of the revised capital adequacy framework.

The amended bill, which was announced last June, will be gazetted on March 4.

Source: Xinhua