Rules
Rules made by the HKDPB
The Representation Rules govern the representations that should be made by Scheme members regarding their membership and the protection status of their financial products. They are made under section 51 of the DPS Ordinance.
The Contribution Rules prescribe the manner in which Scheme members should pay contributions or late payment fees to the HKDPB, as well as the manner in which the HKDPB should pay rebates of contribution to Scheme members. They are made under section 51 of the DPS Ordinance.
Rules made by the HKMA
The Asset Maintenance Rules empower the HKMA to require a Scheme member to maintain assets in Hong Kong. The objectives of the Asset Maintenance Rules are to ensure that, in the event of the failure of a Scheme member, there will be sufficient assets in Hong Kong to cover the priority claims of depositors and to reduce the HKDPB’s shortfall loss. They are made under section 53 of the DPS Ordinance.
Guidelines and circulars
Section 8 of the DPS Ordinance provides that the HKDPB may issue, for the guidance of banks or depositors, guidelines indicating the manner in which it proposes to perform its functions under the Ordinance.
Guideline on Information Required for Determining and Paying Compensation (the "Information System Guideline")
The Information System Guideline aims to provide guidance to Scheme members on the information that the HKDPB will require a Scheme member to submit and the manner in which such information should be submitted to facilitate the HKDPB to determine and pay compensation to depositors in a payout. A set of related questions and answers is also provided for reference.
Circulars on the Information System Guideline:
In order to ensure compliance of Scheme members with the standards as set out in the Information System Guideline, the HKDPB launched a Compliance Review Programme on Scheme members.
Guidance on Representation Rules
The Deposit Protection Scheme (Representation on Scheme Membership and Protection of Financial Products under Scheme) Rules (the “Representation Rules”) govern the representations that should be made by Scheme members regarding their membership and the protection status of their financial products under the Scheme. The HKDPB has issued the following guidance on several aspects of the Representation Rules.
Circulars on Representation Rules:
Return of Relevant Deposits
All Scheme members are required to report annually to the HKDPB the amount of relevant deposits maintained with them by submitting the Return of Relevant Deposits for the HKDPB’s assessment of the amount of contributions payable by Scheme members.
The Returns of Relevant Deposits submitted by Scheme members are subject to regular reviews by auditors to ensure the accuracy of the information contained therein. Details are set out in the following circular:
Guidance on Payment of Contribution
Scheme members are required to pay contributions in accordance with the manner specified in the Deposit Protection Scheme (Payment of Contributions, Late Payment Fees and Rebates) Rules. The HKDPB has issued a guidance note to elaborate the payment procedures.
Guideline on Application for Exemption as a Member of Deposit Protection Scheme
Under section 13 of the DPS Ordinance, an overseas incorporated bank may apply to the HKDPB for exemption from participation in the DPS if the deposits taken by the bank’s Hong Kong offices are protected by a scheme with comparable level and scope of protection in its country of incorporation. The Guideline on Application for Exemption as a Member of DPS sets out the procedures and information required for applying an exemption.
Guidance on Enhanced Deposit Protection in the event of a merger or acquisition involving Scheme members
Starting from 1 January 2025, affected depositors of Scheme members involved in a merger or acquisition will be eligible for enhanced deposit protection for a limited period of time pursuant to sections 27A-27B of the DPS Ordinance. In addition, section 27C of the DPS Ordinance requires Scheme members concerned to notify affected depositors and the HKDPB about the relevant arrangements on or before the effective date of merger or acquisition. A set of questions and answers, with a number of examples, is provided to facilitate Scheme members’ understanding of this enhanced deposit protection and relevant new requirements.
