The Financial Institutions (Resolution) Ordinance (Ordinance), which sets out the framework for a cross-sector regime for the orderly resolution of financial institutions in Hong Kong, was passed by the Legislative Council (LegCo) on 22 June 2016. The Ordinance largely follows the legislative proposals introduced into the LegCo for consideration in December 2015 (see our earlier e-bulletin for an overview of such proposals).
The Ordinance will commence operation on a date to be appointed by the Secretary for Financial Services and the Treasury, following the passing of the necessary regulations to be made as subsidiary legislation under the Ordinance. The government has also indicated that it will, along with the Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC) and the Insurance Authority (IA), maintain close liaison with the industry and the relevant stakeholders in the formulation of the relevant regulations, rules and codes of practice.
On 22 November 2016, the Financial Services and the Treasury Bureau of the Hong Kong government, in conjunction with the HKMA, the SFC and the IA, published a consultation paper in relation to the regulations on "protected arrangements" to be made under section 75 of the Ordinance, which are expected to become operational at the same time as the Ordinance is brought into operation.
An overview of the proposals under the consultation paper is provided in our e-bulletin of 6 December 2016.