13 January 2006

Dear Sir / Madam

Self-Assessment of Compliance with the Code of Banking Practice 2004/05

The industry has completed the annual self-assessment of compliance with the Code of Banking Practice covering the period from June 2004 to May 2005. I write to inform you of the results of this exercise.

177 AIs which provide personal banking services conducted the self-assessment. 151 of them reported full compliance with the Code. The rest of the AIs (26) were identified with five or less instances of non-compliance (see Annex for details).

In terms of systems of control for monitoring compliance with the Code, all AIs reported that they had adequate internal procedures and management oversight to ensure compliance. New products were reviewed to ensure compliance with the Code before they were launched.

The HKMA takes any instances of non-compliance seriously and will continue to monitor compliance with the Code vigilantly. Where non-compliant areas are identified during the self-assessment process, AIs should rectify the situation as soon as practicable, if they have not already done so. A report should be submitted to the HKMA before 10 February 2006 to confirm that all non-compliant areas have been rectified, or if not, the reasons why extended time is required. The report should be sent to the attention of the institution’s usual contact in the Banking Supervision Department.

Should you have any questions, please contact Ms Abby Tam at 2878 1292.

Yours faithfully,　

Raymond Li
Executive Director (Banking Development)