RESTRICTED
WORLD TRADE S/FIN/W/12/Add.4/Rev.2
10December 1997
ORGANIZATION(97-5435)
Original: English Committee onTrade inFinancial Services
COMMUNICATION FROM HONG KONG, CHINA
Second Revised Offer onFinancial Services
Revision
Thefollowing communication iscirculated attherequest ofHong Kong, China toMembers
oftheCommittee onTrade inFinancial Services.
_______________
Further totherevised offercontained inS/FIN/W/12/Add.4/Rev.1 dated 16September 1997,
theGovernment oftheHong Kong Special Administrative Region (HKSAR) ofChina ispleased to
submit asecond revised offer onfinancial services.
Hong Kong, China isfullycommitted toachieving asuccessful conclusion ofthefinancial
servicesnegotiationsbytheagreeddeadlineof12December1997,basedonafullMFN-basedagreement
withthebroadest level ofparticipation from developed anddeveloping members. Tothisend,the
Government oftheHKSAR submitted aninitial offeron11July1997, containing improvements on
topofthecommitments made in1995; andaslightly revised offeron14September toclarify thescope
ofthecommitments made intheoffer.
Notwithstanding ouralready verycomprehensive offer, theGovernment oftheHKSAR has
continued toexplore thepossibility ofmaking further improvements toitsfinancial services offer.
Ithasnowdecided tosubmit asecond revised offer(attached) containing additional commitments in
thefollowing sub-sectors :
(a) financial leasing;
(b) guarantees andcommitments; and
(c) thecross border supply ofadvisory andauxiliary financial services.
Theopportunity hasalsobeentaken toclarify themarket access commitments on“acceptance
ofdeposits andother repayable funds from thepublic ”under Mode 3.
Thesecond revised offerisconditional andtheGovernment oftheHKSAR reserves theright
tomodify orwithdraw allorpartofthecommitments onorbefore 12December 1997.S/FIN/W/12/Add.4/Rev.2
Page2HONG KONG SPECIAL ADMINISTRATIVE REGION OFCHINA
REVISED OFFER ONFINANCIAL SERVICES -SCHEDULE OFSPECIFIC COMMITMENTS
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
FINANCIAL SERVICES
Mode 1/Mode 2
Thecommitments made withrespect tomode 1(cross-border supply) andmode 2(consumption abroad) supply offinancial services inscribed inthissection ofthe
Schedule donotsignify acommitment toallow aservice supplier from theterritory ofanother Member tosolicit business ortoconduct marketing inthe
Hong Kong Special Administrative Region (HKSAR) ofChina.
AllInsurance and
Insurance-Related Services
Life, accident andhealth
insurance services
Non-life insurance services(1) Unbound
(2) None other thanthatstatutory insurances
which include third party liability in
respect ofvehicles andvessels and
employer ’sliability insurance inrespect
ofemployees must bepurchased from an
insurer authorized inHKSAR.(1) Unbound
(2) Unbound
(3) None other thanthatonlyacompany or
anassociation ofunderwriters ispermitted
tocarry oninsurance business.(3) None other thanthatthechief executive
appointed bytheauthorized insurer should
normally reside inHKSAR.
Inthecaseoftheformer, commercial
presence must taketheform ofa
subsidiary, branch orrepresentative
office, although insurance business may
notbecarried outthrough a
representative office.
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(4) Unbound
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under HKSAR banking, securities, insurance andrelated legislation.S/FIN/W/12/Add.4/Rev.2
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Reinsurance andretrocession (1) None, provided thattheinsurance
company isacompany incorporated
outside HKSAR andhasnoagent nor
place ofbusiness inHKSAR.(1) Unbound
(2) None (2) Unbound
(3) None other thanthatonlyacompany or
anassociation ofunderwriters ispermitted
tocarry oninsurance business. Inthe
caseoftheformer, commercial presence
must taketheform ofasubsidiary,
branch orrepresentative office, although
insurance business maynotbecarried out
through arepresentative office.(3) None other thanthatthechief executive
appointed bytheauthorized insurer should
normally reside inHKSAR.
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(4) Unbound
Services auxiliary toinsurance
(including broking andagency
services)(1) None other thanclaims settlement
services, except forsettlement ofclaims
under contracts ofgoods intransit
insurance entered intowholly outside
HKSAR inrespect ofgoods consigned to
HKSAR.(1) Unbound
(2) None (2) Unbound
(3) None (3) None
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(4) Unbound
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under HKSAR banking, securities, insurance andrelated legislation.S/FIN/W/12/Add.4/Rev.2
Page4Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Banking andOther Financial
Services
(excluding insurance)
Acceptance ofdeposits andother
repayable funds from thepublic(1) Unbound
(2) None
3) None other thanthatcommercial presence
must taketheform ofasubsidiary,
branch orrepresentative office, subject to
thefollowing following forms :
(a)Under existing authorization criteria,
applications foranewfullbanking
licence from banks incorporated
outside HKSAR maybegranted for
branches only. Banks incorporated
overseas may apply foralicence to
operate afulllicensed bank ora
restricted licence bank intheform
ofabranch subject tothe
following condition:(1) Unbound
(2) Unbound
(3) None other thanthatallauthorized
institutions (local oroverseas) must
appoint achief executive andnotlessthan
onealternative chief executive, whomust
normally reside inHKSAR.S/FIN/W/12/Add.4/Rev.2
Page5Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Such banks maymaintain (i)offices
towhich customers have access
(physical orotherwise) forthe
purpose ofbanking business (or
deposit-taking business inthecase
ofarestricted licence bank) and/or
forthearranging orentering intoof
anyother financial transactions in
onlyonebuilding (“Office ”includes
automatic automated teller machines
orsimilar terminal devices); and
(ii)nomore thantwoadditional
offices (other thananautomatic
automated teller machine orsimilar
device) towhich customers and
others have access forthepurpose of
anyother typesofbusiness ina
separate building orbuildings. Such
additional offices mayconsist ofnot
more thanoneregional office and
oneback office.
This condition does notapply to
banks incorporated outside
HKSAR licensed before May 1978
inrespect offulllicensed banks
andbefore April 1990 inrespect of
restricted licence banks.S/FIN/W/12/Add.4/Rev.2
Page6Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(b)Limited companies incorporated in
HKSAR which have been institutions
authorised under theBanking
Ordinance byoverseas banks in
HKSAR may apply foralicence to
operate asafulllicensed bank,
restricted licence bank or
deposit-taking company inthe
form ofasubsidiary with
branching rights. Inthecaseofan
application forafullbanking
licence, theinstitution must have
been anauthorized institution for
atleast tenyears andarebeclosely
associated andidentified withHong
Kong mayalsoapply foranewfull
banking licence HKSAR. Overseas
banks may alsoacquire anexisting
locally incorporated bank with
branching rights subject toconsent
oftheMonetary Authority.
(c)Banks incorporated overseas may
apply foralicence tooperate a
restricted licence bank ora
deposit-taking company. Such
restricted licence banks aresubject to
thesame provisions inpara. (a)(i)
and(a)(ii) above. Banks incorporated
overseas mayalsosetup
representative offices inHKSAR, but
such offices areprohibited from
taking deposits orfrom and
undertaking banking business
generally ingeneral .S/FIN/W/12/Add.4/Rev.2
Page7Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(4) Unbound
Lending ofalltypes, including
consumer credit, mortgage
credit, factoring andfinancing of
commercial transaction.(1) Unbound
(2) None
(3) None(1) Unbound
(2) Unbound
(3) None
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(4) Unbound
Financial leasing (1) None
(2) None
(3) None
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39 .1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
Allpayment andmoney
transmission services(1) Unbound
(2) None
(3) None
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under HKSAR banking, securities, insurance andrelated legislation.S/FIN/W/12/Add.4/Rev.2
Page8Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Guarantees andcommitments (1) None
(2) None
(3) None
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
Trading forownaccount orfor
account ofcustomers, whether on
anexchange, inan
over-the-counter market or
otherwise thefollowing:(1) Unbound
(2) None(1) Unbound
(2) Unbound
- Money market instruments
(cheques, bills, certificate
ofdeposits, etc.)
- foreign exchange
- derivative products
including futures and
options
- exchange rateandinterest
rateinstruments, including
products such asswaps,
forward rateagreements,
etc.
- transferable securities(3) None other thanthefollowing :
Only corporations incorporated in
HKSAR, ornatural persons born in
HKSAR orresident inHKSAR forfiveof
thepreceding seven years, orpartnerships
composed ofsuch persons, maybecome
members oftheStock Exchange of
Hong Kong Limited.2
Only corporations incorporated in
HKSAR maybecome members ofthe
Hong Kong Futures Exchange.(3) None other thanthatfordealing in
securities orcommodities futures, there is
aresidence requirement inHKSAR in
respect ofasoleproprietor, or,inthe
caseofapartnership orcompany, in
respect ofatleast onepartner ordirector,
whoisregistered asadealer.
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(4) Unbound
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under HKSAR banking, securities, insurance andrelated legislation.
2Theresidence requirement formemberships canbewaived forpersons ofgood reputation withsubstantial experience ofdealing insecurities.S/FIN/W/12/Add.4/Rev.2
Page9Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Participation inissues ofall
kinds ofsecurities, including
underwriting andplacement as
agent (whether publicly or
privately) andprovision of
services related tosuch issues.(1) Unbound
(2) None
(3) None(1) Unbound
(2) Unbound
(3) None other thanthatifregistration asa
dealer isrequired, asitisinthecaseof
public issues, thelimitations asfordealers
(above) shall apply.
4) Unbound except assetoutinthe
Attachment toGATS/SC/39.(4) Unbound
Asset management, such ascash
orportfolio management, all
forms ofcollective investment
management, pension fund
management, custodial
depository andtrust services.(1) Unbound
(2) None
(3) None
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under HKSAR banking, securities, insurance andrelated legislation.S/FIN/W/12/Add.4/Rev.2
Page10Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Advisory andother auxiliary
financial services onallthe
activities listed insubparagraph
5(a)(v) to(xv)oftheAnnex on
Financial Services, including
credit reference andanalysis,
investment andportfolio research
andadvice, advice on
acquisitions andoncorporate
restructuring andstrategy.(1) Unbound None other than commodity
trading andinvestment advisory service
(2) None
(3) None
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
Provision andtransfer of
financial information, and
financial dataprocessing and
related software byproviders of
other financial services.(1) None
(2) None
(3) None
(4) Unbound except assetoutinthe
Attachment toGATS/SC/39.1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
Bold: additions
Strikeout: deletions
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under HKSAR banking, securities, insurance andrelated legislation.