Cap. 65 - Legal Tender Notes Issue Ordinance

To regulate the issue of bank and currency notes and to provide for certain notes being legal tender and for purposes ancillary thereto. (Amended 20 of 1948 s. 4; 98 of 1995 s. 2 ) [20 March 1895](Format changes—E.R. 4 of 2018) 1. Short title This Ordinance may be cited as the Legal Tender Notes Issue Ordinance.(Amended 5 of 1924 s. 6; 98 of 1995 s. 3) 2. Interpretation In this Ordinance, unless the context otherwise requires—bank (銀行) includes any person, partnership, or company carrying on the business of banking within Hong Kong; legal tender notes (法定貨幣紙幣)— (a) means—(i) currency notes issued in Hong Kong by the Financial Secretary pursuant to section 3(1); and(ii) bank notes issued in Hong Kong by a note-issuing bank in accordance with the terms and conditions (if any) to which its authorization (or deemed authorization) under section 3(2) is subject; and (b) includes any bank notes which were legal tender pursuant to this Ordinance as in force immediately before the commencement* of the Bank Notes Issue (Amendment) Ordinance 1995 (98 of 1995); note-issuing bank (發鈔銀行) means a bank which is— (a) authorized (or deemed to be authorized) under section 3(2); and (b) specified in the Schedule for the purposes of this definition. (Replaced 98 of 1995 s. 4) Editorial Note:*Commencement date: 3 June 1996. 3. Issue of legal tender notes (1) The Financial Secretary may, with the approval of the Chief Executive in Council, issue currency notes. (Amended 68 of 1999 s. 3)(2) Subject to subsection (3), the Financial Secretary may, with the approval of the Chief Executive in Council, by notice in writing authorize a bank to issue bank notes subject to such terms and conditions as the Financial Secretary thinks fit and specified in the notice including, but without limiting the generality of the foregoing, terms and conditions relating to— (Amended 68 of 1999 s. 3)(a) the design, denomination, means of production, distribution, quantity, safe-keeping or destruction of any such notes;(b) arrangements for any such issue which are consistent with the object of maintaining the stability of Hong Kong’s currency.(3) The Financial Secretary shall not authorize a bank under subsection (2) to issue bank notes subject to such terms and conditions as he thinks fit unless he is satisfied that, if the bank is so authorized, its issue of bank notes subject to those terms and conditions will be in accordance with—(a) the provisions of the charter, Ordinance (other than the Companies Ordinance (Cap. 622)), statutes, memorandum of association, or other instrument under which the bank is incorporated; or (Amended 28 of 2012 ss. 912 & 920)(b) those provisions as modified by—(i) the Exchange Fund Ordinance (Cap. 66); or(ii) this Ordinance.(4) Where, immediately before the commencement* of the Bank Notes Issue (Amendment) Ordinance 1995 (98 of 1995), it was lawful under section 4(1) or (2) of this Ordinance as in force immediately before that commencement* for a bank to make, issue, or circulate within Hong Kong bank notes payable to bearer on demand, then the bank shall be deemed to be authorized under subsection (2) to issue bank notes as if, on that commencement*, the Financial Secretary had so authorized the bank, and the other provisions of this Ordinance shall be construed accordingly.(5) The Financial Secretary may, by notice in writing, amend the authorization (or deemed authorization) under subsection (2) of a bank, including any terms and conditions to which the authorization (or deemed authorization) is subject.(6) It shall not be lawful for any bank other than a bank authorized (or deemed to be authorized) under subsection (2) to make, issue, or circulate within Hong Kong bank notes payable to bearer on demand.(7) If a bank contravenes subsection (6) it, its principal manager or agent in Hong Kong, each of its directors (if any) and each of the partners (if any) therein shall be liable on summary conviction to a fine at level 5 and in the case of a second or subsequent conviction to imprisonment for 3 months and to a fine at level 5: Provided that if the offender is a body corporate it shall be liable on a second or subsequent conviction to a fine at level 6. (8) For the purposes of this section, bank note payable to bearer on demand (憑票要求付款予持票人的銀行紙幣) means a bill of exchange or promissory note, issued by any bank, payable to bearer on demand.(Replaced 98 of 1995 s. 4) Editorial Note:*Commencement date: 3 June 1996. 4. Legal tender notes to be legal tender and the currency of Hong Kong Subject to section 5, all legal tender notes shall be legal tender in Hong Kong to any amount and any liability to pay silver currency may be discharged in such notes and in particular every such note shall be deemed to be the currency of Hong Kong for the purpose of any promise to pay printed thereon.(Replaced 98 of 1995 s. 4) 4A. (Repealed 98 of 1995 s. 4) 5. Demonetization of certain legal tender notes (1) The Financial Secretary may from time to time demonetize any legal tender note referred to in paragraph (a)(i) of the definition of legal tender notes.(2) Notice of the demonetization of any legal tender note by the Financial Secretary under subsection (1) shall be published in the Gazette and the note shall cease to be legal tender in Hong Kong from the date specified in the notice.(3) The holder of any legal tender note demonetized by the Financial Secretary under subsection (1) shall, on surrendering the note—(a) to the Monetary Authority appointed under section 5A of the Exchange Fund Ordinance (Cap. 66); and (b) after the date specified in a notice published under subsection (2),be paid from the Exchange Fund established under that Ordinance an amount in legal tender equal to the face value of the note.(Replaced 98 of 1995 s. 4) 5A. Regulations made under section 659 of the Companies Ordinance (Cap. 622) not to apply to bank notes issued by a note-issuing bank (Amended 28 of 2012 ss. 912 & 920)Any regulation made under section 659 of the Companies Ordinance (Cap. 622) does not apply to bank notes issued by a note-issuing bank.(Added 63 of 1989 s. 2. Amended 28 of 2012 ss. 912 & 920) 6. Amendment of Schedule The Financial Secretary may, with the approval of the Chief Executive in Council, by notice in the Gazette amend the Schedule.(Replaced 98 of 1995 s. 5. Amended 68 of 1999 s. 3) Schedule [ss. 2 & 6]Banks Specified for the Purposes of Definition of Note-issuing Bank 1. Bank of China (Hong Kong) Limited. (Replaced L.N. 184 of 2001) 2. Standard Chartered Bank (Hong Kong) Limited. (Replaced L.N. 105 of 2004) 3. The Hongkong and Shanghai Banking Corporation Limited.(Added 98 of 1995 s. 5)