The first phase of the enhancement measures of the Deposit Protection Scheme (“DPS”) came into effect on 1 October 2024, following the gazettal of the DPS (Amendment) Ordinance 2024 on 12 July 2024. (Please see here for our previous article). As mentioned, the Ordinance seeks to enhance the DPS to strengthen protection for depositors, maintain banking stability and keep up with international standards and the latest developments of Hong Kong.
The enhancement measures that came into effect on 1 October 2024 include:
- raising the deposit protection limit from HK$500,000 to HK$800,000 per depositor per bank;
- refining the levy system to enable the DPS Fund underpinning the DPS to reach the target fund size within a reasonable timeframe under the increased protection limit; and
- streamlining the negative disclosure requirement on non-protected deposit transactions for private banking customers.
The second phase of the enhancement measures will come into effect on 1 January 2025. The measures include providing enhanced coverage to affected depositors upon a bank merger or acquisition and requiring Scheme members to display the DPS membership sign on their electronic banking platforms.
For the press release, please see here.
