Jurisdiction - Hong Kong
Reports and Analysis
Hong Kong – The Revised Code Of Banking Practice.

20 May, 2015


Legal News & Analysis – Asia Pacific – Hong Kong – Banking & Finance


On 6 February 2015, the Hong Kong Association of Banks and the DTC Association jointly issued the revised Code of Banking Practice (“Code“). The Code sets out the minimum standards to be observed by authorized institutions (“AIs”), namely licensed banks, restricted license banks and deposit taking companies in Hong Kong in dealing with and providing services to their customers.

The Code does not have the force of law but it is endorsed by the Hong Kong Monetary Authority (“HKMA“) and the HKMA expects all AIs to comply with it. Compliance with the Code is monitored by the HKMA as part of its supervisory function.

The recent revision of the Code, which took effect on 6 February 2015, is based on a comprehensive review undertaken by the Code of Banking Practice Committee aimed at aligning the Code with the international practices issued by the G20 nations, and in so doing strengthening the protections afforded to customers and the standards expected of banks.

The Code has been revised in a number of significant areas which are outlined below.

Scope Of The Code

The Code has been extended to cover the subsidiaries and affiliated companies controlled by AIs and which provide banking services in Hong Kong. These institutions are required to adhere to the Code regardless of whether they are regulated, licensed or supervised by any financial regulator in Hong Kong.

General Principles

The Code incorporates the “G20 High-level Principles on Financial Consumer Protection” as part of its general principles. These principles include treating customers equitably and fairly, explaining products and services transparently, promoting customer awareness and protecting customer data.

Disclosure And Transparency

The Code includes provisions on the disclosure and transparency of banking terms and conditions which require, for example: provision of written terms and conditions of banking services upon the application of a prospective customer; setting out terms in a reasonable layout and plain language; and setting out major terms and conditions of loan products in the form of a new standardized ‘Key Facts Statements’ to allow customers to easily access and compare details of such products.

Credit Card Provisions

The Code expands the provisions on credit card related practices, concerning, for example, the issuance, replacement and repayment of credit cards, credit card fees and charges and transparency of credit card terms and conditions which includes providing Key Facts Statements to customers that are legible and in plain language.

Account Opening And Closures

The Code enhances the provisions related to the opening and closure of customer accounts. In particular, for account openings, banks are required to comply with the Hong Kong anti-money laundering and counter-terrorist financing due diligence requirements and provide customer due diligence information to customers upon request.
AIs are expected to take active steps to comply with the revised provisions as soon as practicable and to achieve full compliance within 6 months of the Code’s effective date. Where system changes are required, banks are granted a further 6 months to comply with the relevant provisions.


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For further information, please contact:


Ben Hammond, Partner, Ashurst

[email protected]

Gareth Hughes, Partner, Ashurst

[email protected]


Christopher Whiteley, Partner, Ashurst

[email protected]


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