Zenith CC&P Current Awareness

​Banks seek exemption from Hong Kong Competition Ordinance

8 January 2018

Prof. Suzanne Rab

Fourteen banks – including JP Morgan, Standard Chartered, HSBC, Citigroup and Bank of China – have applied to the Hong Kong Competition Commission to seek confirmation that their Code of Banking Practice is compatible with the Competition Ordinance.

The Competition Ordinance came into effect in December 2015 and prohibits restrictive agreements through its First Conduct Rule.

If the application is successful, the Hong Kong Competition Commission will issue a decision exempting the Code from enforcement.

The Code is voluntary but non-compliance could, in principle, lead to enforcement action from the Hong Kong Monetary Authority.

The banks maintain that the Code has neither the object or effect of harming competition in Hong Kong.  However, it has been acknowledged that there are some elements which could be regarded as giving rise to competition issues to the extent that they could restrict the independence of banks to determine their own charges.

The Competition Commission has invited comments by 15 February 2018.

Current Awareness

By the CC&P team