The Deposit Protection Scheme (Amendment) Ordinance 2024 (“Ordinance”) was passed on 3 July 2024. (Our previous newsletter also published on 3 July mentioned this but did not anticipate that it would be passed so quickly! Please see here for our previous article). As mentioned, the Ordinance seeks to enhance the Deposit Protection Scheme (“DPS”) to strengthen protection for depositors, maintain banking stability and keep up with international standards and the latest developments of Hong Kong.
The Ordinance includes several measures to enhance the DPS, including:
- raising the protection limit from the current HK$500,000 to HK$800,000;
- refining the levy system to enable the DPS Fund to reach its target fund size under the increased protection limit within a reasonable time frame;
- providing enhanced coverage to affected depositors upon a bank merger or acquisition;
- requiring the display of the DPS membership sign on the electronic banking platforms of DPS members; and
- streamlining the negative disclosure requirement on non-protected deposit transactions for private banking customers.
The Ordinance will be implemented in two phases. The first phase comes into effect on 1 October 2024. This covers measures requiring shorter preparation including amendments relating to the enhancement of protection limit to HK$800,000; the build-up levy mechanism; certain requirements on display of membership sign; and the regulation of disclosure in relation to private banking customers. The second phase comes into operation on 1 January 2025 covering the remaining measures.
For the press release, please see here. To access a copy of the Bill, please see here.
