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.
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