In Hong Kong, it is common practice that there is a written employment contract between the employer and the employee which sets out the terms and conditions of an employment. The following case indicates that unless clearly provided in the employment contract, an employer cannot unilaterally vary the terms of the employment contract and such variation may be a breach of contract and the employer could be liable for damages ...
Under the Employment Ordinance, an employer has the right to terminate an employee’s employment summarily without notice or payment in lieu of notice in certain situations, one of which is employee misconducting himself, such conduct being inconsistent with the due and faithful discharge of his duties ...
It is quite common in Hong Kong for employers to arrange an employee's employment by using dual contracts to take advantage of the tax position. Under Hong Kong law, only income derived from Hong Kong is taxable and earnings under a foreign employment contract with non-Hong Kong entity in respect of duties carried out outside Hong Kong are not taxable. However, the benefits under this arrangement may reduce following a recent UK guideline ...
In the United States, a federal judge approved on 10 May 2005 of the plan of United Airlines (“UA”) to terminate four employees’ defined-benefit pension plans and the pension responsibility are shifted to and assumed by the government’s pension insurer, the Pension Benefit Guaranty Corporation (“PBGC”). The decision will have a great impact on pension obligations to 120,000 current and former employees of UA and could have far-reaching implications for the pensions industry worldwide ...
The Labour Law of the People’s Republic of China (“Labour Law”) is applicable to all employment relationships between individuals and enterprises in China. However, local governments of provinces, autonomous regions and municipalities may, and most of them do, issue detailed measures and rules for the implementation of the Labour Law. Such detailed measures are promulgated based on the Labour Law, with changes and specific details made in light of the local conditions ...
On 30 June 2005, the Hong Kong Monetary Authority (“HKMA”) finalised the self-assessment framework on AML compliance. The self-assessment framework has been introduced for the purposes of facilitating the assessment by authorised institutions’ (“AIs”) of their compliance with the regulatory requirements on AML and to supplement the HKMA’s on-site examinations ...
On 30 June 2005, the House of Lords delivered its judgment in National Westminster Bank plc v. Spectrum Plus Limited & others [2005] UKHL 41. The case has resolved a controversial legal issue concerning the distinction between a fixed charge and a floating charge. Fixed Charges and Floating Charges It may be helpful first to describe the basic difference between the operation of a fixed charge and that of a floating charge ...
On 20 April 2005, the People’s Bank of China (“PBOC”) and China Banking Regulatory Commission (“CBRC”) promulgated the Administration of Pilot Projects for Securitisation of Credit Assets Procedures (“the Procedures”). The enactment of the Procedures has received widespread support since they reflect one of the first attempts at regulating securitisation in China ...
The Securities and Futures Commission (SFC) proposes to amend Chapter 8.7 of the Code of Unit Trusts and Mutual Funds (Code). To date, a total of 13 hedge funds have been authorised by the SFC pursuant to the existing hedge fund guidelines. The SFC has indicated that some applications for authorisation have failed because of the failure of the applicant hedge fund manager to comply with the experience requirements. The revised Chapter 8 ...
The SFC has adopted a split approach in dealing with UCITS III funds. For funds which will adopt enhanced use of derivatives and make changes to their investment policies or objectives in migrating to UCITS III, the SFC requires: • a notice to existing holders explaining the proposed changes and confirmation from the fund or its manager that the home regulator has approved the final version of this notice ...
Following the SFC’s consultation paper in February 2005 proposing to allow SFC authorised collective investment schemes to invest in Real Estate Investment Trusts (REITs), the Code was amended in late April. Chapter 7.14 of the Code has been revised to allow SFC authorised collective investment schemes to invest in listed REITs, subject to compliance with the investment limits as set out in Chapters 7.1 and 7.2. (i.e. 7 ...
Under Part XV of the Securities & Futures Ordinance (SFO), where a company has an interest (or a short position) in Hong Kong listed shares, its holding company is deemed to have that interest; this attribution is carried the whole way up a corporate chain to the ultimate holding company. This imposes onerous monitoring requirements on financial services groups ...
China presents enormous opportunities for the wealth management industry, as the domestic financial market and players develop increasing sophistication. The financial regulators in China are pushing ahead with financial market reforms and regulations, across the equity and bond markets, over banks, insurance companies, securities companies, securities investment fund management companies, trust investment companies and other financial institutions ...
The new Arbitration Rules of the International Economic and Trade Arbitration Commission (CIETAC) came into force on 1 May 2005. The following are the major changes: Specialist Arbitration Rules The new Rules provide for the possibility of using rules tailored made for specific industries. Todate, only rules for financial disputes have been published. Specialist panels of arbitrators have also been set up according to the nature of dispute ...
Revised Guideline on the Sharing and Use of Consumer Credit Data through a Credit Reference Agency On 18th January 2005, the Hong Kong Monetary Authority (“HKMA”) issued a revised statutory guideline, namely the Supervisory Policy Manual on the Sharing and Use of Consumer Credit Data through a Credit Reference Agency (IC-6) (“CRA Guideline”) ...
The State Development and Reform Commission and the Ministry of Commerce recently revised two key catalogues regarding foreign investment. The Catalogue of Priority Industries for Foreign Investment in the Central and Western Regions (the “Regional Catalogue”) was revised on 23 July 2004. The revised Regional Catalogue replaces the 2000 version with effect from 1 September 2004 ...
The State Development and Reform Commission (“SDRC”) promulgated the Provisional Measures for the Administration of the Verification of Foreign Investment Projects on 9 October 2004. The Provisional Measures, which entered into effect on the date of their promulgation, are based on the Law of the People's Republic of China on Administrative Licensing and the Decision of the State Council on the Reform of the Investment System (as discussed respectively in the No ...
The Ministry of Commerce (“MOFCOM”) promulgated the Regulations on the Investment in and Establishment of Holding Companies by Foreign Business Entities on 17 November 2004. The Regulations, which became effective on 17 December 2004, revise regulations of the same name promulgated in 2004 (as discussed in the 2004.2 issue of China Legal Update) (the “Original Regulations”) ...
The Ministry of Commerce (“MOFCOM”) promulgated the Measures for the Administration of Commercial Franchise Operations on 31 December 2004. The Measures, which came into force on 1 February 2005, replace the 1997 Measures for the Administration of Commercial Franchise Operations (for Trial Implementation) which only governed franchising involving domestic operators ...
The National Bureau of Statistics promulgated the Measures of the National Bureau of Statistics for the Administration of Foreign-related Surveys 13 October 2004. The Measures, which came into force on the date on which they were promulgated, replace the 1999 Provisional Measures of the National Bureau of Statistics for the Administration of Foreign-related Social Surveys ...
The State Administration of Taxation issued the Urgent Notice of the State Administration of Taxation on Relevant Issues in Strengthening the Administration of the Levy and Collection of Value-Added Tax for Newly Established Commercial and Trading Enterprises on 13 August 2004 ...
The State Administration of Foreign Exchange issued the Notice of the State Administration of Foreign Exchange on Relevant Issues in the Internal Operational Control of Foreign Exchange of Multinational Corporations on 18 October 2004. The Notice, which became effective on 1 November 2004, relaxes some of the restrictions on foreign exchange transfers between subsidiaries of multinational companies ...
The State Administration of Taxation revised the Rules for the Administration of Tax on Business Transactions Between Affiliated Enterprises (for Trial Implementation) effect from 22 October 2004. The Rules replace a regulation of the same name issued in 1998 (“1998 Rules”). Expanded scope of application The Rules have a wider scope of application than the 1998 Rules ...
