The HKMA commissioned a review to make recommendations on how it can best discharge its functions in promoting the general stability and effective working of the banking system under the Banking Ordinance. Some of the recommendations relating to the HKMA’s regulatory and supervisory functions include:

  • the HKMA should maintain its primary focus on prudential issues but also remain involved in consumer protection issues that fall within its current statutory remit;
  • the powers of investigation of the HKMA under the Banking Ordinance should be extended so that they are no less than those available to the SFC;
  • the HKMA should make efforts to reduce on-site examinations of authorised institutions, and reconsider the role of risk-based examinations in light of a more specialised and thematic approach;
  • the HKMA should consolidate the existing guideline and supplement on anti-money laundering and counter-terrorist financing, taking into account recommendations from the Financial Action Task Force on Money Laundering;
  • the HKMA should review its policy on the distinction between statutory and non-statutory guidelines, as well as the distinction between minimum requirements and best practice; there should be consideration as to whether the HKMA should be given power to make formal rules under the Banking Ordinance;
  • HKMA’s regulatory requirements should be set within an explicit framework of high level fundamental principals;
  • the elements of the policy framework should be brought together in a regulatory handbook similar to that of the SFC; and
  • the current three-tier structure of authorised institutions should be reduced to two tiers: banks and other "deposit-takers", with the principal dividing line being the ability to conduct banking business and take "retail deposits".

A copy of the full text of the report is available here.