Policy Statement & Submission

Commercial Credit Reference Agency
Comments on the Consultation Paper
Hong Kong General Chamber of Commerce
September 2000

　

Introduction

　

The Small and Medium Enterprises Committee of the Hong Kong General Chamber of Commerce has considered the Consultation Paper on the Proposal to set up a Commercial Credit Reference Agency, published by the Hong Kong Monetary Authority, and would like to submit their comments as follows.

In general, the Chamber agrees that a properly administered CCRA could be beneficial for both banks and clients. The presence of a credit reporting agency would be all the more helpful if Hong Kong were to become a hub for B2B e-commerce. On the other hand, there should be room for the market to play a part in defining the nature and extent of the CCRA.

Institutional options for setting up a CCRA

We appreciate the merits for a self-regulated CCRA owned jointly by the banking industry and the public sector, possibly via a joint venture between the Hong Kong Monetary Authority and the Hong Kong Association of Banks (i.e. the third option in the Consultation Paper). At the same time, some of our members have suggested that the Agency should have the benefit of the involvement of business associations outside of the banking sector.

An important aspect of the management of the Agency is to ensure user participation and a balanced representation between banks and clients on the board of directors of the CCRA.

The CCRA should be a neutral information provider and should not act as a rating agency or an arbitration body. It would be up to the banks making use of the information to do their own rating.

While we agree with the HKMA on the need for mandatory submission of information by authorised institutions to the CCRA, we believe strongly that this should be achieved without the need for legislation.

Scope of coverage of the CCRA

The design of information requisition should be treated with great care. The scope of information should be on a need basis and not be excessive. The Agency should only collect information pertaining to enterprises rather than individuals. Only legal papers should be included. Written confirmation from clients should be obtained to ascertain the accuracy of information. Any renewal of information should be copied to the client concerned for information/confirmation.

We agree with a more limited scope of coverage for the initial running of the CCRA. The scope can be further expanded when the system is up and running and proved useful.

Banks, as users of the CCRA, are advised to take note that as SMEs may be involved in various businesses of different nature, level of operation and turnover, the information should be for reference only and different cases should be considered on their own merits.

Operation of the CCRA

The operation of the CCRA should be governed by the principle of transparency and security of information. Although the CCRA applies to companies, not individuals, the relevant principles under the Personal Data (Privacy) Ordinance (e.g. on accuracy and security) should be observed.

After first placement of a client's information to the agency, notification to the client should be given. During updating of information, client protection should be of prime concern.

All information from the agency should only be obtained, updated or installed with the client's consent.

Banks should be responsible for the updating of information. To relieve the workload of banks, data should be updated only when necessary rather than on a regular basis.

Clients should have the right to request for information, and for amendment of particulars pertaining to their firm. The Agency and the associated banks should respond within a reasonable time frame and any charges for such services should be reasonable. 　

(Ends)