21 September 2001

The Chief Executive
All locally incorporated authorized institutions

Dear Sir/Madam,

Supervisory Policy Manual ("SPM"):
CG-1: "Corporate Governance of Locally Incorporated Authorized Institutions"
CA-S-6: "Instruments Eligible for Inclusion in Core Capital"

I am pleased to inform you that the Monetary Authority is issuing the above two modules of the SPM today. The modules incorporate some comments received after they were posted onto the HKMA's web-sites for consultation.

These two modules are being issued as statutory guidelines - CG-1 "Corporate Governance of Locally Incorporated Authorized Institutions" under section 7(3) of the Banking Ordinance and CA-S-6 "Instruments Eligible for Inclusion in Core Capital" under section 16(10) of the Ordinance - by notice in the Gazette today. They will take immediate effect.

On-line access to the modules is available under the icon of "Supervisory Policy Manual" in the HKMA's public (http://www.info.gov.hk/hkma/eng/bank/spma/index.htm) and private (http://www.hkfin.net) web-sites.

Should you have any questions relating to the Manual or the individual modules, please feel free to contact either me or Ms Rita Yeung on 2878-1388.

Yours faithfully,

Simon Topping
Executive Director (Banking Policy)