Launch of Commercial Credit Reference Agency (26 October 2004) Speech by Mr. Arthur Yuen of the Hong Kong Monetary Authority     Thank you, Lina. First of all, let me join Julian and Lina to welcome you all to this press conference. I remember that when the HKMA released for public consultation the proposal of establishing a CCRA in the summer of 2000, we received broad-based support from the banking and corporate sectors, as well as various public organisations including the Office of the Privacy Commissioner and the Securities and Futures Commission. The Legislative Council also passed a motion in April 2001, urging the Government to implement a CCRA as soon as practicable. Following several years of hard work by the industry, the CCRA is finally ready for launch. The CCRA is indeed an important addition to the financial infrastructure of Hong Kong. It not only helps improve the credit risk management of authorized institutions ("AIs"), but also enables SMEs with good credit standing to obtain bank credits more easily and quickly, and at better terms. The establishment of the CCRA will also bring us on par with other major financial markets, such as the US and the UK, thereby reinforcing Hong Kong's status as an international financial centre. Since Julian and Lina already highlighted the key features of the scheme and Lawrence will give you a presentation shortly, I will not go into the details of the scheme. Rather, I note that when my colleagues gave talks to SMEs to introduce the CCRA scheme, the questions that often came up reflected some general concerns over data confidentiality. Let me therefore take this opportunity to address two major areas of concern on this issue. First, some SMEs are quite concerned that once the CCRA is set up, their finances will become publicly accessible information. They are under the impression that anyone can go and get the CCRA reports from D&B. As Julian mentioned just now, banks will need to have the consent of their SME customers before they can contribute the credit data to the CCRA. In other words, without such consent, banks cannot supply their customers' information to the CCRA. More importantly, not anyone can have access to the data. Only AIs and their participating subsidiaries, which are regulated by the HKMA, can have access to SMEs' information maintained by the CCRA. Furthermore, AIs can access the CCRA database when and only when they are assessing the SME's application for a credit facility, or reviewing or renewing the SME's existing facilities. AIs cannot access the CCRA database for any other purposes such as marketing. Needless to say, an SME will be allowed to access its own information held at the CCRA. Secondly, some SMEs are worried that all the information they have supplied to their bank will automatically go to the CCRA. Such worries are unwarranted. Apart from the usual demographic information such as company name, address, phone number, etc, only credit information will be submitted to the CCRA. Credit information in this context includes positive as well as negative data. Positive data refer to the limits of their credit facilities and the fact that whether collateral is provided. Negative data refer to repayments that are overdue more than 60 days. Hence, there is no need for SMEs to be concerned whether information such as the balance sheet of their companies, the assets of their directors, and so forth will be provided to the CCRA. You may ask who will ensure that the CCRA participants will observe these rules. The answer is that the HKMA will. We have already published a Supervisory Policy Manual module on the sharing and use of commercial credit information via a CCRA, which is available on our website (http://www.info.gov.hk/hkma/eng/bank/spma/index.htm). All participants are expected to play by the rules laid down in the module and the HKMA will closely monitor compliance with the module. Without further ado, let me pass the time to Lawrence, who will give you more details about the operation of the CCRA.