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  • Corporate Ethics, Conflicts of Interest and Code of Conduct

    • HC-2.2.2

      Each member of the board must understand that under the Company Law he is personally accountable to the conventional bank licensee and the shareholders if he violates his legal duty of loyalty to the conventional bank licensee, and that he can be personally sued by the conventional bank licensee or the shareholders for such violations.

      Amended: January 2013
      October 2010

    • HC-2.2.3

      The Board must establish corporate standards for approved persons and employees. This requirement should be met by way of a documented and published code of conduct or similar document. These standards must be communicated throughout the bank, so that the approved persons and staff understand the importance of conducting business based on good corporate governance values and understand their accountabilities to the various stakeholders of the licensee. Banks' approved persons and staff must be informed of and be required to fulfil their fiduciary responsibilities to the bank's stakeholders.

      October 2010

    • HC-2.2.4

      An internal code of conduct is separate from the business strategy of a bank. A code of conduct should outline the practices that approved persons and staff should follow in performing their duties. Banks may wish to use procedures and policies to complement their codes of conduct. The suggested contents of a code of conduct are covered below:

      (a) Commitment by the Board and management to the code. The code of conduct should be linked to the objectives of the bank, and its responsibilities and undertakings to customers, shareholders, staff and the wider community (see HC-2.2.3 and HC-2.2.4). The code should give examples or expectations of honesty, integrity, leadership and professionalism;
      (b) Commitment to the law and best practice standards. This commitment would include commitments to following accounting standards, industry best practice (such as ensuring that information to clients is clear, fair, and not misleading), transparency, and rules concerning potential conflicts of interest (see HC-2.3);
      (c) Employment practices. This would include rules concerning health and safety of employees, training, policies on the acceptance and giving of business courtesies, prohibition on the offering and acceptance of bribes, and potential misuse of conventional bank licensee's assets;
      (d) How the conventional bank licensee deals with disputes and complaints from clients and monitors compliance with the code; and
      (e) Confidentiality. Disclosure of client or bank information should be prohibited, except where disclosure is required by law (see HC-1.2.10 b).
      Amended: April 2011
      Amended: January 2011
      October 2010

    • HC-2.2.5

      The Central Bank expects that the Board and its members individually and collectively:

      (a) Act with honesty, integrity and in good faith, with due diligence and care, with a view to the best interest of the bank and its shareholders and other stakeholders (see Paragraphs HC-2.2.2 to HC-2.2.4);
      (b) Act within the scope of their responsibilities (which should be clearly defined—see HC-1.2.9 and HC-1.2.11 and not participate in the day-to-day management of the bank;
      (c) Have a proper understanding of, and competence to deal with the affairs and products of the bank and devote sufficient time to their responsibilities; and
      (d) To independently assess and question the policies, processes and procedures of the bank, with the intent to identify and initiate management action on issues requiring improvement. (i.e. to act as checks and balances on management).
      Amended: April 2011
      Amended: January 2011
      October 2010

    • HC-2.2.6

      The duty of loyalty (mentioned in Paragraph HC-2.2.2 above) includes a duty not to use property of the conventional bank licensee for his personal needs as though it was his own property, not to disclose confidential information of the conventional bank licensee or use it for his personal profit, not to take business opportunities of the conventional bank licensee for himself, not to compete in business with the conventional bank licensee, and to serve the conventional bank licensee's interest in any transactions with a company in which he has a personal interest.

      October 2010

    • HC-2.2.6A

      [This Paragraph was moved to Paragraph HC-5.4.39].

      Amended: January 2014
      Amended: October 2012
      Added: July 2012

    • HC-2.2.6B

      [This Paragraph was moved to Paragraph HC-5.4.40].

      Amended: January 2014
      Added: July 2012

    • HC-2.2.7

      For purposes of Paragraph HC-2.2.6, an approved person should be considered to have a "personal interest" in a transaction with a company if:

      (a) He himself; or
      (b) A member of his family (i.e. spouse, father, mother, sons, daughters, brothers or sisters); or
      (c) Another company of which he is a director or controller,

      is a party to the transaction or has a material financial interest in the transaction. (Transactions and interests which are de minimis in value should not be included.)

      October 2010