22 November 2006

Dear Geoffrey,

Banking (Capital) Rules and Banking (Disclosure) Rules

As you are aware, following the completion of the draft Banking (Capital) Rules and the draft Banking (Disclosure) Rules released respectively on 3 August and 1 September 2006, we published on 27 October 2006 in our public website a Feedback Statement summarizing our responses to the comments received. These comments were mainly requests for clarification on certain technical points, a few of which resulted in drafting refinements which were incorporated in the Gazette version of the Rules published on 27 October 2006.

Following the introduction of the Rules into the Legislative Council (LegCo) on 1 November 2006 for negative vetting, we have received some further comments from the LegCo Secretariat and consider that the meaning of certain terms or the drafting language of the text of the Rules could be further refined for clarification purposes.

Enclosed is a table summarizing the necessary refinements to the gazetted Rules. As you can see, rather than substantive changes, these are minor drafting amendments that seek to further improve the consistency and interpretation of the Rules. As the negative vetting period (assuming no extension) will end on 28 November, I would be most grateful if you could liaise with your members and let us have any comments on or before 27 November 2006. This letter and the enclosed table have been made available to all authorized institutions in the HKMA's private website (http://www.stet.finnet.hk/index.htm).

I am writing in similar terms to the Hong Kong Association of Banks, members of the Banking Advisory Committee and the Deposit-taking Companies Advisory Committee and the Financial Secretary.

Yours sincerely,

Simon Topping
Executive Director (Banking Policy)