RESTRICTED
WORLD TRADE S/FIN/W/12/Add.4
11July1997
ORGANIZATION(97-2972)
Original: English Committee onTrade inFinancial Services
COMMUNICATION FROM HONG KONG, CHINA
Initial Offer onFinancial Services
Addendum
Thefollowing communication iscirculated attherequest ofHong Kong, China tomembers
oftheCommittee onTrade inFinancial Services.
_______________
Inresponse tothecalloftheCommittee onTrade inFinancial Services (CTFS) forinitial offers
by14July1997, theGovernment oftheHong Kong Special Administrative Region (HKSAR) ofChina
ispleased tosubmit itsinitial offer onfinancial services.
Hong Kong isamajor international financial centre andhasaveryliberal financial services
regime: over80ofthetop100international banks arerepresented intheterritory andoverhalfof
the220insurance agencies doing business intheterritory areinternational. Hong Kong made avery
comprehensive offerinthelastround -existing commitments onmarket access andnational treatment
cover almost allthefinancial services sectors within thescope ofthenegotiations. Moreover, the
Government oftheHKSAR doesnotmaintain anyrestrictions onforeign equity participation or
citizenship/nationality requirements.
Notwithstanding this,theGovernment oftheHKSAR hasdecided toputforward further
improvements ontopoftheexisting commitments. Theimprovements contained intheinitial offer
include:
(a) commitments inthecross-border supply ofreinsurance andretrocession services;
(b) commitments inthecross-border supply ofservices auxiliary toinsurance;
(c) removal ofafootnote which served toexclude thecross-border supply ofinternational
value-added orbasic telecommunication services fromthecommitments onprovision
andtransfer offinancial information; and
(d) removal oftherequirement thatlimited companies incorporated intheHKSAR need
tobepredominantly beneficially owned byHong Kong interests inorder tobeeligible
toapply foranewfullbanking licence.
Inthelightofthediscussions onthedistinction between Mode 1andMode 2attheCTFS
meeting on5June1997 andtheinformal meeting convened bytheSecretariat on27June1997, a
headnote hasbeenincluded intheinitial offer, setting outthescope ofthecommitments under Mode 1
andMode 2.
Theinitial offerisconditional andtheGovernment oftheHKSAR reserves therighttomodify
orwithdraw allorpartofthecommitments onorbefore 12December 1997.S/FIN/W/12/Add.4
Page2HONG KONG SPECIAL ADMINISTRATIVE REGION OFCHINA
SCHEDULE OFSPECIFIC COMMITMENTS -INITIAL OFFER
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 with respect tomode 1(cross-border supply) andmode 2(consumption abroad) supply offinancial services inscribed inthis
section oftheSchedule donotsignify acommitment toallow aservice supplier from theterritory ofanother Member tocarry onbusiness, hold outto
carry onbusiness orsolicit business ortoconduct marketing intheHong Kong Special Administrative Region (HKSAR) ofChina.
AllInsurance and
Insurance-Related Services
Life, accident andhealth
insurance services
Non-life insurance services(1) Unbound (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 inHong Kong
HKSAR .(2) Unbound
(3) None other thanthatunder theInsurance
Companies Ordinance, onlyacompany or
anassociation ofunderwriters ispermitted
tocarry oninsurance business.(3) None other thanthataninsurer authorized
inHong Kong HKSAR must appoint a
locally-based chief executive.
Inthecaseoftheformer, commercial
presence must taketheform ofa
subsidiary, branch orrepresentative
office, although insurance business may
notbecarried outthrough a
representative office.S/FIN/W/12/Add.4
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
(4) Unbound except forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists assetoutinthe
Attachment toGATS/SC/39 .14) Unbound
Reinsurance andretrocession (1) Unbound
None, provided thattheinsurance
company isacompany incorporated
outside HKSAR which carries onin
HKSAR reinsurance andretrocession
business only andhasnoagent nor
place ofbusiness inHKSAR.(1) Unbound
(2) None (2) Unbound
(3) None other thanthatunder theInsurance
Companies Ordinance, onlyacompany 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 thanthataninsurer authorized
inHong Kong HKSAR must appoint a
locally-based chief executive.
(4) Unbound except forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists assetoutinthe
Attachment toGATS/SC/39.1(4) Unbound
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under Hong Kong HKSAR banking, securities, insurance andrelated
legislation.S/FIN/W/12/Add.4
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
Services auxiliary toinsurance
(including broking andagency
services)1) Unbound
None other than:
(a)thatinsurance brokers andagents
must beregistered agents orauthorized
insurance brokers; and
(b)claims settlement services, except
forsettlement ofclaims under contracts
ofgoods intransit insurance entered
intowholly outside HKSAR inrespect
ofgoods consigned toHKSAR.(1) Unbound
(2) None (2) Unbound
(3) None unless thesupply ofanysuch
services canberegarded ascarrying on
orholding oneself outascarrying onany
class ofinsurance business inorfrom
Hong Kong HKSAR inwhich casethe
limitations assetoutunder(3) None
"Life, accident andhealth insurance
services, non-life insurance services ”,and
“reinsurance andretrocession ”(above)
shall apply.
(4) Unbound except forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists assetoutinthe
Attachment toGATS/SC/39 .1(4) Unbound
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under Hong Kong HKSAR banking, securities, insurance andrelated
legislation.S/FIN/W/12/Add.4
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
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 :
Under existing authorization criteria,
applications foranewfullbanking
licence from banks incorporated outside
Hong Kong HKSAR maybegranted for
branches only. Such banks maymaintain
offices towhich customers have access
forthepurpose ofbanking business
and/or forthearranging orentering into
ofanyother financial transactions inonly
onebuilding (“Office ”includes automatic
teller machines orsimilar terminal
devices).(1) Unbound
(2) Unbound
(3) None other thanthatinstitutions
authorised under theBanking Ordinance
must appoint achief executive andnot
lessthanonealternative chief executive,
each ofwhom issubject toaresidence
requirement inHong Kong HKSAR .
Such banks mayalsomaintain nomore
thantwoadditional offices (other thanan
automatic teller machine orsimilar
device) towhich customers andothers
have access forthepurpose ofanyother
typeofbusiness inaseparate building or
buildings. Such offices mayconsist of
notmore thanoneregional office andone
back office.S/FIN/W/12/Add.4
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
Limited companies incorporated inHong
Kong HKSAR which have been
institutions authorised under theBanking
Ordinance foratleast tenyears andare
predominantly beneficially owned by
Hong Kong interests orareotherwise
closely associated andidentified with
Hong Kong mayalsoapply foranewfull
banking licence.
Banks incorporated overseas mayapply
foralicence tooperate arestricted
licence bank oradeposit-taking company.
Such restricted licence banks may
maintain offices towhich customers have
access forthepurpose ofthetaking of
deposits and/or thearranging orentering
intoofanyother financial transactions in
onlyonebuilding (“Office ”includes
automatic teller machines orsimilar
terminal devices). Such banks mayalso
maintain nomore thantwoadditional
offices (other thananautomatic teller
machine orsimilar device) towhich
customers andothers have access forthe
purpose ofanyother typeofbusiness ina
separate building orbuildings. Such
offices mayconsist ofnotmore thanone
regional office andoneback office.
Banks incorporated overseas mayalsoset
uprepresentative offices inHong Kong
HKSAR ,butsuch offices areprohibited
from taking deposits orfrom undertaking
banking business generally.S/FIN/W/12/Add.4
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 forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists 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
(4) Unbound except forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists 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 forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists 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
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
Trading forownaccount orfor
account ofcustomers, whether
onanexchange, inan
over-the-counter market or
otherwise thefollowing:
- 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(1) Unbound
(2) None
(3) None other thanthefollowing :
Only corporations incorporated inHong
Kong HKSAR ,ornatural persons born in
Hong Kong HKSAR orresident inHong
Kong HKSAR forfiveofthepreceding
seven years, orpartnerships composed of
such persons, maybecome members of
theStock Exchange ofHong Kong
Limited.2
Only corporations incorporated inHong
Kong HKSAR maybecome members of
theHong Kong Futures Exchange.(1) Unbound
(2) Unbound
(3) None other thanthatfordealing in
securities orcommodities futures, there is
aresidence requirement inHong Kong
HKSAR inrespect ofasoleproprietor,
or,inthecaseofapartnership or
company, inrespect ofatleast one
partner ordirector, whoisregistered asa
dealer.
(4) Unbound except forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists assetoutinthe
Attachment toGATS/SC/39 .1(4) Unbound
2Theresidence requirement formemberships canbewaived forpersons ofgood reputation withsubstantial experience ofdealing insecurities.
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under HKSAR banking, securities, insurance andrelated legislation.S/FIN/W/12/Add.4
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
(4) Unbound except forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists assetoutinthe
Attachment toGATS/SC/39 .1(1) Unbound
(2) Unbound
(3) None other thanthatifregistration asa
dealer isrequired, asitisinthecaseof
public issues, thelimitations asfordealers
(above) shall apply.
(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 forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists assetoutinthe
Attachment toGATS/SC/39 .1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
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
(2) None
(3) None
(4) Unbound except forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists assetoutinthe
Attachment toGATS/SC/39 .1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under Hong Kong HKSAR banking, securities, insurance andrelated
legislation.S/FIN/W/12/Add.4
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
Provision andtransfer of
financial information, and
financial dataprocessing and
related software byproviders of
other financial services.(1) None1
(2) None
(3) None
(4) Unbound except forintra-corporate
transfer ofgeneral managers, senior
managers andspecialists assetoutinthe
Attachment toGATS/SC/39 .1(1) Unbound
(2) Unbound
(3) None
(4) Unbound
1Commitments excludes cross border supply ofinternational value added orbasic telecommunications services.
1Commitments onpresence ofnatural persons areconfined tobusinesses regulated under Hong Kong HKSAR banking, securities, insurance andrelated
legislation.