Subcommittee to Study Issues Arising from Lehman Brothers-related Minibonds and Structured Financial Products (Report)



B.

Evidence/documents provided by the Hong Kong Monetary Authority

DocumentsSubcommittee reference no.
1.Witness statement of Mr Joseph YAM, MA W6(C)
2.Statement by the Chief Executive of the Hong Kong Special Administrative Region on "Responsibilities of the Financial Secretary and the Secretary for Financial Services and the Treasury" issued on 27 June 2003 W6(C)
Annex 1
3."Policy Objectives in Financial Affairs and Public Finance" issued by the FS on 27 June 2003 W6(C)
Annex 2
4.Exchange of Letters between the FS and the Monetary Authority of 25 June 2003 W6(C)
Annex 3
5."Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission" dated May 2006 W6(C)
Annex 4(A)
6."Management, Supervision and Internal Control Guidelines for Persons Licensed by or Registered with the Securities and Futures Commission" dated April 2003 W6(C)
Annex 4(B)
7.A list of circulars issued by the HKMA in relation to the conduct of regulated activities W6(C)
Annex 5
8.(A) A list of the MoU Meetings between the HKMA and the SFC where issues relating to the sale of structured products by intermediaries were discussed

(B) A summary of the correspondence between the HKMA and the SFC related to the Annex 6(A) MoU Meetings
W6(C)
Annex 6
9.Comparison of recommendations made in the HKMA's Review Report and practices of overseas regulators W6(C)
Annex 7
10.HKMA's Supervisory Policy Manual module OR-1 dated 28 November 2005 W6(C)
Annex 8
11.Relevant extracts (in Chinese) from MA's speaking notes and the record of the Financial Affairs Panel, MA's Viewpoint articles, and transcripts of comments to the media W6(C)
Annex 9
12."New securities supervisory regime – register to be maintained by the HKMA and specific guidance in relation to relevant individuals" dated 27 February 2003 W6(C)
Annex 10
13."New publications of the Securities and Futures Commission and HKMA" dated 21 August 2003 W6(C)
Annex 11
14."SFC Guidelines for Addressing Analyst Conflicts of Interest" dated 8 November 2004 W6(C)
Annex 12
15."Register of relevant individuals under section 20(1)(ea) of the Banking Ordinance" dated 21 February 2005 W6(C)
Annex 13
16."SFC press release – Extracts and Advertisements Concerning Prospectuses under the Companies Ordinance" dated 31 March 2005 W6(C)
Annex 14
17."Controls to ensure the fitness and propriety of staff of authorized institutions" dated 28 September 2006 W6(C)
Annex 15
18."Controls to ensure compliance with section 114(3) of the Securities and Futures Ordinance and section 20(4) of the Banking Ordinance" dated 13 June 2007 W6(C)
Annex 16
19."Thematic examinations on controls to ensure fitness and propriety of relevant individuals" dated 12 March 2008 W6(C)
Annex 17
20."Access to recordings of telephone conversation and Lehman Minibonds collaterals information" dated 5 November 2008 W6(C)
Annex 18
21."Despatch of information to investors of retail investment product" dated 10 December 2008 W6(C)
Annex 19
22."Circular Issued by the Securities and Futures Commission on the Revised Advertising Guidelines Relating to SFC-authorised Collective Investment Schemes" dated 2 January 2009 W6(C)
Annex 20
23."Report of the HKMA on Issues Concerning the Distribution of Structured Products Connected to Lehman Group Companies" dated 9 January 2009 W6(C)
Annex 21
24."Circular Issued by the Securities and Futures Commission Regarding Self-Examination of Controls and Procedures on Suitability Obligations" dated 26 February 2009 W6(C)
Annex 22
25."Fair and reasonable arrangements for settling complaints related to the selling of investment products" dated 5 March 2009 W6(C)
Annex 23
26."Circular Issued by the Securities and Futures Commission on Suspension of the Closing Auction Session" dated 20 March 2009 W6(C)
Annex 24
27."Implementation of recommendations in the HKMA's Report on Issues Concerning the Distribution of Structured Products Connected to Lehman Brothers" dated 25 March 2009 W6(C)
Annex 25
28.Curriculum Vitae of Mr Joseph YAM, MA W7**
29.List of duties and responsibilities of the MA W8
30.Opening remark by Mr Joseph YAM Chi-kwong, MA, at the hearing on 14 April 2009 W9
31.The remark delivered by Mr Joseph YAM, MA, at the hearing on 28 April 2009 on the Subcommittee's decision to decline his request for confidentiality of the excised parts of the "Report of the Hong Kong Monetary Authority on Issues Concerning the Distribution of Structured Products Connected to Lehman Group Companies" as submitted to the Financial Secretary on 31 December 2008 W10
32.Witness statement of Mr Y K CHOI, Deputy Chief Executive of HKMA W11(C)
33.Curriculum Vitae of Mr Y K CHOI, Deputy Chief Executive of HKMA W12**
34.Supervisory Policy Manual module SB-1: Supervision of regulated activities of SFC-registered authorized institutions M1
35.Circular issued by HKMA dated 1 March 2005: The Securities and Futures Commission's Report on Selling Practices of Licensed Investment Advisers M2
36.Circular issued by HKMA dated 3 March 2006: Retail Wealth Management (RWM) Business M3
37.Circular issued by HKMA dated 7 May 2007: Questions and Answers on Suitability Obligations Published by the Securities and Futures Commission M4
38.Circular issued by HKMA dated 23 September 2008: Investment products related to Lehman Brothers M5
39.Circular issued by HKMA dated 23 October 2008: Selling of investment products to retail customers M6
40.HKMA's response to the Clerk to Subcommittee's letter dated 22 December 2008 M7
41.Frequently asked questions issued by Lehman Brothers Asia Limited, the arranger of the Minibonds, to distributors and noteholders dated 17 September 2008;

Frequently asked questions issued by Lehman Brothers Asia Limited, the arranger of the ProFund Notes, to distributors and noteholders dated 18 September 2008; and

Frequently asked questions issued by Lehman Brothers Asia Limited, the arranger of the Pyxis Notes, to distributors and noteholders dated 18 September 2008
M7
Appendix 1
42.Securities and Futures Commission's Licensing information booklet M7
Appendix 2
43.SFC's application forms for new registration and addition of regulated activities and the related supplements M7
Appendix 3
44.HKMA's application forms for approval to become and Executive Officer and change of regulated activities for an Executive Officer and the related supplements M7
Appendix 4
45.Relevant extracts of BO and SFO M7
Appendix 5
46.SFC's Fit and Proper Guidelines M7
Appendix 6
47.SFC's Guidelines on Competence and the revised Appendix C M7
Appendix 7
48.SFC's Guidelines on Continuous Professional Training M7
Appendix 8
49.SFC's frequently asked questions on responsible officers M7
Appendix 9
50.Section 193 of SFO M7
Appendix 10
51.Circular issued by HKMA dated 24 March 2003: Executive officers of registered institutions M7
Appendix 11
52.HKMA's response to the Clerk to Subcommittee's letter dated 30 December 2008 M8
53.HKMA's response to the Clerk to Subcommittee's letter dated 22 December 2008 M9
54."Plan for 2008 and Beyond" in the Annual Report 2007 of HKMA M10
55.Circular issued by HKMA dated 13 January 2003: Calls in Relation to Securities or Futures Products and Services M11
56.Circular issued by HKMA dated 1 March 2007: Thematic Examinations on Investment Advisory Activities M12
57.Circular issued by HKMA dated 1 June 2007: SFC's Report on Findings of Second Round of Thematic Inspection of Licensed Investment Advisers M13
58.Information provided by HKMA in March 2009 to the Financial Affairs Panel on Lehman Brothers-related Minibonds and Structured Financial Products M14
59.Written responses from Mr Joseph YAM, MA, to follow-up issues arising from the hearing on 14 April 2009 M15
60.Report of Hong Kong Monetary Authority on Issues Concerning the Distribution of Structured Products Connected to Lehman Group Companies M16
61.Written responses from Mr Joseph YAM, MA, to follow-up issues arising from the hearing on 17 April 2009 M17
62.Written responses from Mr Joseph YAM, MA, to follow-up issues arising from the hearing on 28 April 2009 M18
63.Written responses from Mr Joseph YAM, MA, to follow-up issues arising from the hearing on 8 May 2009 M19
64.Written responses from Mr Joseph YAM, MA, to follow-up issues arising from the hearing on 14 April 2009 M20
65.Written responses from Mr Joseph YAM, MA, to follow-up issues arising from the hearing on 15 May 2009 M21
66.Written responses from Mr Joseph YAM, MA, to the follow-up issue arising from the hearing on 22 May 2009 M22
67.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 26 May 2009 M23
68.Supervisory Policy Manual CR-G-12: Credit Derivatives M24
69.Written responses from Mr Joseph YAM, MA, to follow-up issues arising from the hearing on 22 May 2009 M25
70.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 2 June 2009 M26
71.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 5 June 2009 M27
72.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 2 June 2009 M28
73.Further information provided by Mr Joseph YAM, MA, dated 15 June 2009 M29
74.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 12 June 2009 M30
75.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 5 June 2009 M31
76.Information provided by Mr Y K CHOI, Deputy Chief Executive of HKMA, dated 2 July 2009 M32
77.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to the Clerk to Subcommittee's letter dated 8 October 2009 M33
78."Questions and answers about Lehman Brothers Minibonds Repurchase Scheme by Distributing Banks" issued by HKMA dated 19 August 2009 M34
79.Written responses to range of issues for the hearing on 10 November 2009 from Mr Y K CHOI, Deputy Chief Executive of HKMA M35
80.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 10 November 2009 M36
81.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 10 November 2009 M37
82.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 17 November 2009 M38
83.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 17 November 2009 M39
84.Written responses from Mr Y K CHOI, Deputy Chief Executive of HKMA, to follow-up issues arising from the hearing on 17 November 2009 M40
85.Information provided by Mr Arthur K H YUEN, Deputy Chief Executive of HKMA, in response to the Clerk to Subcommittee's letter dated 4 January 2010 M41
86.Information provided by Mr Arthur K H YUEN, Deputy Chief Executive of HKMA, in response to the Clerk to Subcommittee's letter dated 11 February 2010 M42
87.Further information provided by Mr Arthur K H YUEN, Deputy Chief Executive of HKMA dated 24 May 2010 M43
88.Further information provided by Mr Arthur K H YUEN, Deputy Chief Executive of HKMA dated 5 August 2010 M44
89.Sample checklists for on-site examinations of banks provided by Mr Joseph YAM, MA, in response to members' requests at the hearing on 22 May 2009 M2(C)##
90.Comments on relevant extracts of the draft report of the Subcommittee from HKMA W100(C)**
91.Comments on relevant extracts of the draft report of the Subcommittee from Mr Joseph YAM, then MA W101(C)**


** Documents not available for public inspection

## Documents available for public inspection at the Legislative Council Library