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The Hong Kong Banking Regime  The Hong Kong Monetary Authority (HKMA) is responsible for regulating and supervising banking business and the business of taking deposits in Hong Kong. It is also responsible for the authorization, suspension and revocation of “authorized institutions”.  Hong Kong maintains a three-tier system of deposit-taking institutions, namely, (i) licensed banks, (ii) restricted licence banks, (iii) deposit-taking companies. They are collectively known as authorized institutions.  The legal framework for banking supervision in Hong Kong is primarily governed by the Banking Ordinance. Institutions which intend to carry on banking business or the business of taking deposits in Hong Kong are required to be authorized by the HKMA under section 16(1) of the Banking Ordinance. 1

The 3-tier Banking System and Local Offices  Licensed banks : o Only licensed banks may operate current and savings accounts, and accept deposits of any size and maturity from the public and pay or collect cheques drawn by or paid in by customers.  Restricted licence banks : o Restricted licence banks are principally engaged in merchant banking and capital market activities. They may take deposits of any maturity of HK$500,000 and above. 2

The 3-tier Banking System and Local Offices  Deposit-taking companies: o Deposit-taking companies are mostly owned by, or otherwise associated with, banks. These companies engage in a range of specialised activities, including consumer finance and securities business. They may take deposits of HK$100,000 or above with an original term of maturity of at least three months.  Others – local representatives offices : o Overseas banks may establish local representative offices in Hong Kong. However, these offices are not allowed to engage in any banking business and their role is confined mainly to liaison work between the bank and its customers in Hong Kong. o The HKMA will approve an application for an local representatives office if it is satisfied that the bank is adequately supervised by the relevant banking supervisory authority 3

Authorisation of Authorised Institutions  The authorization criteria are clearly set out in the Seventh Schedule to the Banking Ordinance.  The HKMA has also set out its interpretation of each of the minimum authorization criteria in its “Guideline on Minimum Criteria for Authorization”.  Hong Kong places no barrier to overseas banks operating locally in the territory, whether the transactions are conducted in Hong Kong dollars or other currencies. 4

Minimum Authorisation Criteria  The general authorisation criteria include, among others : (i) Adequacy of home supervision o An applicant which is incorporated outside Hong Kong must be a bank which, in the opinion of the HKMA, is adequately supervised by the relevant banking supervisory authority. o In making his assessment, the HKMA will take account of:  the legal and administrative powers of the home supervisor;  the supervisory framework of the home supervisor;  the method of supervision adopted by, and the resources available to, the home supervisor; and  past experience in dealings with the home supervisor. 5

Minimum Authorisation Criteria (ii) Identity of controllers o The HKMA must be satisfied that he knows the identity of each controller of the institution. (iii) Fitness and propriety of directors, controllers, chief executives and executive officers o the HKMA, in general, takes into account, among others, the following factors:  the person's reputation and character;  the person’s knowledge and experience, competence, soundness of judgment and diligence;  whether the person has a record of non-compliance with various non-statutory codes or has been reprimanded or disqualified by regulators (including overseas regulators) or professional bodies. 6

Minimum Authorisation Criteria (iv) Adequate financial resources o The HKMA is a member of the Basel Committee on Banking Supervision (BCBS) and, in making an assessment of the financial strength of the institution, the HKMA will have primary regard to the adequacy of its capital measured in a way which is consistent with the latest applicable capital standards issued by the BCBS. o In the case of an institution incorporated outside Hong Kong, the HKMA will generally require an overseas bank which wishes to set up a branch or restricted licensed bank / deposit taking company subsidiary in Hong Kong to maintain capital levels consistent with those applicable under the latest Basel Capital Accord. 7

Minimum Authorisation Criteria (v) Adequate liquidity o All authorised institutions in Hong Kong are required to meet a minimum monthly average liquidity ratio of 25%. o This is calculated as the ratio of liquefiable assets (e.g. marketable debt securities and loans repayable within one month subject to their respective liquidity conversion factors) to qualifying liabilities (basically all liabilities due within one month). 8

Minimum Authorisation Criteria (vi) Adequate disclosure of information o The Banking (Disclosure) Rules set out the minimum standards for public disclosures which authorized institutions must make in respect of their profit and loss, state of affairs and capital requirements. o The rules apply to both Hong Kong incorporated institutions (including those that are subsidiaries of foreign banks) and overseas incorporated authorized institutions, except for those institutions that fall within the exemption criteria (basically for small restricted licensed banks and deposit-taking companies). 9

Minimum Authorisation Criteria (vii) Other criteria include : o adequate systems of control for appointment of managers o adequate control of large exposure o requirement to maintain adequate provisions o requirement to maintain adequate accounting systems and adequate systems of control o business to be conducted with integrity, prudence and competence The HKMA may, by notice served on an authorized institution, attach to its authorization such conditions as he may think proper. 10

Charltons  Charltons’ extensive experience in corporate finance makes us uniquely qualified to provide a first class legal service  Extensive initial public offering and listing experience  Representative offices in Shanghai, Beijing and Yangon  “Boutique Firm of the Year” awarded to Charltons by Asian Legal Business for the years 2002, 2003, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013 and 2014  “Corporate Finance Law Firm of the Year in Hong Kong” awarded to Charltons in the Corporate INTL Magazine Global Award 2014  “Hong Kong's Top Independent Law Firm” awarded to Charltons in the Euromoney Legal Media Group Asia Women in Business Law Awards 2012 and 2013  “Equity Market Deal of the Year” awarded to Charltons in 2011 by Asian Legal Business for advising on the AIA IPO 11

Charltons  Excellent links and networks with law firms worldwide  Julia Charlton was named a “Leading Lawyer” by Asia Law & Practice for the years 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013 and 2014  “Asian Restructuring Deal of the Year” 2000 awarded to Charltons by International Financial Law Review for their work with Guangdong Investment Limited  Finalist for China Law & Practice’s “Deal of the Year (M&A)” 2007 for their work on Zijin Mining Group Co Ltd.’s bid for Monterrico Metals plc 12

Practice Areas  Capital markets  Corporate and commercial  Securities  Mergers and acquisitions  Investment funds: China and offshore  Derivatives  Restructuring  Venture capital  Investment 13

Practice Areas  Capital Markets - Global offerings and GDRs - IPOs and Placings - Listing on the Hong Kong, Shanghai, Shenzhen, London and Luxembourg stock exchanges  Corporate and Commercial - Mergers and Acquisitions - Joint ventures - Stock exchange advisory - Corporate governance - Stock options - Employment law  Securities - Compliance and disclosure - Dealing and advisory authorisations in Hong Kong and Mainland China - Options  Investment Funds: China and Offshore - Authorised and unauthorised funds - Stock exchange listing (including Hong Kong, Dublin, London, Cayman, Bermuda stock exchanges) - Closed-end and open-ended structures - Hedge funds  Mergers and Acquisitions - Hong Kong Code on Takeovers and Mergers - Public offerings - Reverse takeovers - Private acquisitions - Due diligence in China and elsewhere in Asia  Derivatives - Structuring listed and unlisted derivatives - Placings on Hong Kong and Luxembourg listed warrants and other structured products - Compliance and regulatory  Restructuring - Schemes of arrangement - Workouts - Corporate recovery - Asset injections  Investment - China investment regulations - Structuring a major foreign direct investment projects - Evaluation and due diligence  Private Equity and Venture Capital - Optimum PRC and offshore structures - Preferred stock financing - PRC regulations - Exit Strategies 14

The Charltons Team The team is composed of individuals with the following knowledge and skills:  A detailed knowledge of Hong Kong law and practice in relation to securities and licensed corporations.  Extensive experience of providing legal services for Hong Kong and overseas clients, including corporate banks and licensed corporations.  Extensive experience of communicating with the Securities and Futures Commission (SFC) including arranging and attending with the SFC for new applicants.  In depth knowledge of the relevant securities law, and relevant rules, codes and guidelines issued by the SFC from time to time. 15

Team Profile: Julia Charlton Julia Charlton – Partner  Julia, LL.B (1st class Honours), A.K.C (Kings College, London) was admitted as a solicitor in England & Wales in 1985 and has practised as a solicitor in Hong Kong since  Julia is a member of the Listing Committee of the Stock Exchange of Hong Kong Limited and the Takeovers Panel and the Takeovers Appeal Panel of the SFC.  Julia was named a “Leading Lawyer” by Asia Law & Practice for the years 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013 and  Julia was named a “Leading Advisor” by Acquisition International for  Julia was also named the “Capital Markets Lawyer of the Year – Hong Kong” in the Finance Monthly Global Awards  Julia has extensive experience in China work and is a Mandarin speaker. 16

Contact Us Hong Kong Office Dominion Centre 12 th Floor 43 – 59 Queen’s Road East Hong Kong Telephone: Fax: Website: (852) (852)

Our Locations China Beijing Representative Office , Vantone Centre A6# Chaowai Avenue Chaoyang District Beijing People's Republic of China Telephone: (86) Facsimile: (86) Shanghai Representative Office Room 2006, 20th Floor Fortune Times 1438 North Shanxi Road Shanghai People's Republic of China Telephone: (86) Facsimile: (86) In association with:- Myanmar Yangon Office of Charltons Legal Consulting Ltd 161, 50 th Street Yangon Myanmar Networked with:- 18