The Government has proposed amending the Banking Ordinance to tighten the regulatory control of the Hong Kong Monetary Authority on banks' securities business.
The proposed law change would allow the HKMA to impose a wider range of sanctions on banks that commit malpractice in their securities business, Deputy Secretary for Financial Services Au King-chi told legislators yesterday.
The HKMA had agreed to set up three more investigation teams to increase supervision on banks and to make sure only qualified staff were employed, she said.
The proposed change would also relax the secrecy provision in the Banking Ordinance to facilitate the exchange of information between the HKMA and the Securities and Futures Commission, Ms Au said.
The HKMA and the SFC would sign a new memorandum of understanding to enhance their co-operation in regulating banks' securities business, she said.
Among the wider sanctions, the HKMA could be given the power to issue public reprimands to banks.
The present law prohibited the HKMA from publicly reprimanding banks for fear a public censure would damage depositors' confidence, which might result in a bank run, Ms Au said.
