HK DPB proposed to enhance the deposit protection scheme (DPS) in Hong Kong.
HKMA, HK Treasury also published the proposed key enhancements of the scheme.
The enhancement would mean about 92% of depositors are protected, up from 89%.
Enhancements
Increase protection limit from HKD 500k to HKD 800k to catch up with inflation.
Refining the levy system to enable the DPS Fund underpinning the scheme to reach the target fund size within a reasonable timeframe under increased protection limit.
Provide enhanced coverage to affected depositors for six months upon a bank merger.
Require scheme members to display the DPS membership sign on digital channels.
Streamline negative disclosure on non-protected deposits for private bank customers.
Effectiveness
Consultation is open for public comments, which shall be submitted by Oct. 12, 2023.
Finalized that the protection limit will be increased from HKD 500k to HKD 800k.
An amendment bill will be submitted to HK PRL; expected effective date will be in the fourth quarter of 2024; implement the other enhancements in phases by early 2025.
Apr. 2024 HK PRL Bill to be Gazetted
On Apr. 26, 2024, HK PRL said Deposit protection scheme (amendment) bill 2024 will be gazetted on May 3, 2024 for first reading on May 8; issued Legislative Council brief.
May 3, 2024 Bill Gazetted
On May 3, 2024, HK DPB, HK Treasury announced the Deposit protection scheme (amendment) bill 2024 has been gazetted, with first reading scheduled for May 8, 2024.
Noted the bill aims to strengthen protection for depositors, maintain banking stability, and keep up with international standards and the latest developments of Hong Kong.
May 8, 2024 HK GVT, HK PRL First Reading
On May 8, 2024, HK PRL held the first reading of the Deposit protection scheme (amendment) bill 2024, which was published by HK GVT on the e-legislation website.
HK Treasury commented the measures will help further strengthen the DPS, enhance depositors' confidence, raise the resilience of the banking sector and financial system stability overall and reinforce Hong Kong's position as an international financial center.
The ordinance will be gazetted on Jul. 12, 2024 and then implemented in two phases.
The first phase comes into effect on Oct. 1, 2024, and will cover measures requiring less preparatory work, such as the enhancement of the protection limit to HKD 800k.
The second phase, which covers other measures, will be implemented on Jan. 1, 2025.
Jul. 12, 2024 Ordinance Gazetted
On Jul. 12, 2024, HK PRL, HK DPB reported gazettal of the Deposit protection scheme (amendment) ordinance 2024 on same day, coming into force in accordance with s.1.
Specified provisions relating to the enhancement of the protection limit to HKD 800k come into force on Oct. 1, 2024; remaining provisions come into force on Jan. 1, 2025.
Regulators
HK DPB; HK GVT; HK PRL; HK Treasury; HKMA
Entity Types
Bank; CNSM
Reference
OG, Ord 19 of 2024, 7/12/2024; PR 7/3/2024; OG 5/8/2024; PR 5/3/2024; PR 4/26/2024; PR 2/6/2024; CP, PR, 7/13/2023
