PLC Paper No. CB(1) 43/97-98
(These minutes have been seen by the Administration and cleared with the Chairman)
Ref : CB1/PL/FA/1
LegCo Panel on Financial Affairs
Minutes of Meeting held on Monday, 19 May 1997, at 8:30 a.m. in Conference Room A of the Legislative Council Building
Members present :
Dr Hon HUANG Chen-ya, MBE (Chairman)
Hon Eric LI Ka-cheung, OBE, JP (Deputy Chairman)
Hon Martin LEE chu-ming, QC, JP
Hon Ronald ARCULLI, OBE, JP
Hon CHIM Pui-chung
Hon James TO Kun-sun
Hon Ambrose LAU Hon-chuen, JP
Dr Hon LAW Cheung-kwok
Hon NGAN Kam-chuen
Hon SIN Chung-kai
Members absent :
Hon David K P LI, OBE, LLD (Cantab), JP
Dr Hon Philip WONG Yu-hong
Hon Andrew CHENG Kar-foo
Hon Paul CHENG Ming-fun, JP
Hon Mrs Elizabeth WONG, CBE, ISO, JP
Public officers attending :
Attendance by invitation :
- Agenda Item III
- Office of the Privacy Commissioner for Personal Data
- Mr Stephen LAU
- Privacy Commissioner for Personal Data
- Mr Tony LAM
- Assistant Privacy Commissioner for Personal Data
Clerk in attendance:
- Ms Estella CHAN
- Chief Assistant Secretary (1)4
Staff in attendance :
- Ms YUE Tin-po
- Senior Assistant Secretary (1)6 (Atg)
I. Information papers issued since last meeting
1. No information paper had been issued since the last meeting.
II. Items for discussion at the next meeting scheduled for 2 June 1997
2. Members agreed that the subject "Review of the Hong Kong Companies Ordinance" would be discussed at the next meeting. The Chairman requested members to notify the Clerk of any further items they wished to discuss.
III. Protection of consumers credit information
(LegCo Paper No. CB(1)1525/96-97)
3.Mr Stephen LAU briefed members on the salient points of the consultation paper on a draft code of practice giving practical guidance on compliance with the Personal Data (Privacy) Ordinance (PDPO), Cap.486, in the provision of consumer credit reference services, as contained in the presentation materials tabled at the meeting.
(Post-meeting note : The presentation materials were circulated vide LegCo Paper No. CB(1)1638/96-97 dated 19 May 1997.)
4. Mr LAU elaborated that the purpose of the provision for a code of practice was to regulate the consumer credit reference industry to ensure a fair and open operation, and to protect consumers by increasing the transparency and accuracy of information held by the industry. Under the draft code of practice, consumers would be given rights to access credit reports from credit reference agencies (CRAs). He remarked that the draft code of practice did not cover the provision of commercial credit reference services.
5. Responding to Mr CHIM Pui-chungs question on the role of the Privacy Commissioners Office (PCO), Mr LAU said that the scope of PCOs work was very wide and included all aspects of personal data privacy. At the moment, PCO was conducting promotional programmes to educate the public on their rights under the PDPO. Apart from developing a code of practice for CRAs, it had also encouraged representative organizations of different trades to issue their own codes of practice on compliance with the requirements set out in PDPO.
6. Regarding CRAs which failed to comply with the finalised code of practice in the provision of services, Mr LAU advised that individual borrowers could take legal actions against the agency concerned. On receipt of complaints about contravention of the code, PCO could conduct formal investigations into the matter. It would issue an enforcement notice if the contravention was substantiated. He added that proof of a contravention of a code of practice approved by the Privacy Commissioner gave rise to a presumption of a breach of the relevant requirement of the Ordinance. The person who had contravened the code of practice would bear the burden of disproving this presumption.
7. In response to Mr NGAN Kam-chuen, Mr LAU advised that the Hong Kong Monetary Authority (HKMA) was examining the provision of a centralised comprehensive data base on consumer credit information in consultation with lending institutions and other credit providers. Nevertheless, he remarked that the issue was beyond the scope of the code of practice.
|8. As to the regulatory mechanism for monitoring of debt collection agencies (DCAs), Mr LAU advised that under the proposed code of practice, DCAs were allowed to retain personal data for internal reference purposes for no longer than two years. PCO would conduct random inspections, or ad-hoc audits in response to complaints and enforce regulatory control against DCAs if they failed to comply with the requirement.||PCO|
9. Concerning credit providers duties under the code of practice, Mr LAU advised that a credit provider should notify an individual if it had taken into account a credit report on the individual from a CRA in refusing to grant credit. It should also inform the individual as to how to obtain a copy of the credit report from the CRA concerned. Dr LAW Cheung-kwok suggested that credit reports should be given to individual borrowers as a matter of routine once their applications for credit were rejected by credit providers. Mr LAU noted his view and undertook to consider the cost and efficiency aspects of the suggestion in consultation with HKMA.
10. Regarding the requirements on CRAs to respond to individuals requesting access to credit information under the code of practice, Mr LAU explained that CRAs should respond to access requests from individuals who had been refused credit within a specified period of time. In case data kept were under dispute, the CRA concerned should delete the data if it was unable to verify them within 30 days. The CRA might also be required to include in its records an individuals statement on the disputed data if, for various reasons, verification of the data was not practicable.
|11. In response to Mr James TO, Mr Raymond LI advised that explicit information on all fees and charges in the provision of credit card services would be given to consumers in accordance with the draft code of banking practice. This should minimize disputes regarding fees and charges. As regards disputed amounts settled in court, the CRA concerned should be provided with information on the judgment given for necessary amendments to the credit reference data kept.||PCO|
12. At members request, Mr LAU undertook to consider the following views:
- the scope of "other crime" stipulated in clause 2.6.6 seemed too wide and should be restricted to crime related to unlawful disclosure of credit information;
- approval should be sought from or notification be given to PCO if credit information on individuals was to be transferred outside Hong Kong; and
- legislation should be introduced to regulate all CRAs and DCAs following implementation of the code of practice.
13. Members were in support of the proposed code of practice in principle.
IV. Regulation of red chip stocks trading
(LegCo Paper No. CB(1)1591/96-97)
V. Regulation of intermediaries
(LegCo Paper No. CB(1)1489/96-97)
|14. Mr NEOH stressed that SFCs approach to regulation of intermediaries was educational and remedial in nature. Training sessions and seminars conducted by SFC on compliance with the code of conduct and new legislation had been offered to compliance officers of different intermediaries. This would ensure proper operation of the regulated businesses under appropriate management supervision and enhance protection for investors in the market. In addition, inspection visits were conducted on all intermediaries over a three-year cycle. The inspection team of SFC would work with senior management of intermediaries to rectify deficiencies and remedy defects. SFC would also take disciplinary actions against intermediaries for breaches of the code of conduct or relevant legislation.||SFC|
15. In response to Mr SIN Chung-kais enquiries, Mr NEOH advised that SFC had set up hotlines and an internet web site for investors to access past records of disciplinary actions on intermediaries. He further advised that SFCs decisions to take disciplinary actions against intermediaries were subject to review by the Securities and Futures Appeals Panel or judicial review by the court. Under the circumstances, SFC was bound by the relevant ordinance not to reveal to the public details of the cases until the outcomes of appeals were concluded. At the Chairmans request, SFC undertook to review existing legislation to allow public access to details of cases pending appeals.
Last Updated on 18 August 1998