Public consultation on proposed enhancements to the Deposit Protection Scheme launched

The Deposit Protection Scheme (DPS) in Hong Kong recently underwent a comprehensive review by the Deposit Protection Board. A consultation paper has been issued by the Board to propose improvements to the scheme based on the findings of the review. While the review determined that the DPS is mostly in line with international standards, certain areas have been identified for improvement. These include the protection limit, levy system, deposit protection arrangements during bank mergers, and representation regime. The consultation paper contains specific policy recommendations, such as increasing the protection limit from HK$500,000 to HK$800,000, reverting to the build-up levy to accommodate the higher protection limit, providing extended coverage to depositors affected by bank mergers for six months, requiring Scheme members to display the DPS membership sign on their digital channels, and simplifying negative disclosure requirements for non-protected deposits for private banking clients. The Deposit Protection Board is seeking feedback on the proposed enhancements until 12 October 2023.

Consultation Paper:

https://www.dps.org.hk/en/download/consultation/Consultation%20Paper%20on%20DPS%20Enhancements_Eng%20(final).pdf

Resource:

https://www.hkma.gov.hk/eng/news-and-media/press-releases/2023/07/20230713-3/

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