Launch of the Banking Industry Integrity Charter in Hong Kong
Hong Kong’s new Banking Industry Integrity Charter (Integrity Charter)1 was launched on 9 October 2024 by the Independent Commission Against Corruption (ICAC) in collaboration with the Hong Kong Monetary Authority (HKMA) and The Hong Kong Association of Banks (HKAB).
Pioneered by the ICAC with full support of the HKMA and HKAB, the goal is to encourage banks to implement an integrity management system (IMS) and continue enhancing their anti-corruption capabilities.
Ultimately, the Integrity Charter aims to help maintain stability in the banking system and bolster public confidence – all-in-all, reinforcing Hong Kong’s position as an international financial centre.
Major points to note regarding the Integrity Charter2:
Voluntary Participation
The Integrity Charter operates on a voluntary and self-committed basis.
Commitment to Fundamental Principles
Banks joining the Integrity Charter are committed to adhere to five fundamental principles to promote integrity management in the banking industry:
- Promote a sound bank culture and conduct banking business with a high degree of integrity;
- Establish a code of conduct and enforce it effectively, making reference to the core elements of the Model Integrity Policy;
- Assign a staff member with independence, competence, experience, integrity and seniority as the bank’s Integrity Officer to assist in overseeing and implementing the bank’s code of conduct, good corporate governance and banking practices;
- Provide integrity management training to staff to enhance their anti-corruption awareness, and arrange for the Integrity Officer –or representative(s) – to attend ICAC integrity management training at least once a year; and
- Promptly report allegations or suspicion of bribery, corruption, fraud, deception or other illegal activities to the ICAC or other appropriate law enforcement agencies.
The above fundamental principles are consistent with the regulatory requirements and guidelines of the HKMA. It is expected that banks will not need to deploy substantial extra resources to meet the Integrity Charter commitments.
Integrity Officer
The Integrity Officer is the bank’s delegate and contact person to liaise with the ICAC on matters relating to the Integrity Charter. As the signing party to the Integrity Charter is the bank, any follow-up actions of the ICAC for significant deviation from the Integrity Charter will only apply to the bank and not to the Integrity Officer.
Positions that are essential to corporate governance within the bank are well-suited for the role of the Integrity Officer. For examples, internal audit, fraud risk management, ABC (anti-bribery and corruption) or AML (anti-money laundering) compliance.
To help streamline operations and ensure consistent regulatory compliance across members of the same group, banks within the group may appoint the same staff member to be in charge of implementing the Integrity Charter.
Benefits of Joining the Integrity Charter
The ICAC lays out the “3As” benefits of joining the Integrity Charter:
- Amplifying Business and Commercial Values
Joining the Integrity Charter explicitly demonstrates a bank’s commitment to the highest standards of integrity and hence boosts customer confidence in the bank’s integrity and reliability. - Attracting Investors
With integrity being part and parcel to Governance (in Environmental, Social and Governance initiatives), implementing the IMS helps attract investors from all over the world (including the Belt and Road countries) and create business opportunities for the bank. - Adding Resistance against Corruption and Integrity Violations
By increasing its resistance against corruption and integrity violations, the bank will be well placed to attain international standards and share its experience with other banks and institutions (including those in the Belt and Road countries), thereby telling the good story of Hong Kong’s clean business environment.
Subscription to the Integrity Charter is free of charge. The ICAC will provide advisory services, integrity training and corruption prevention publications and tools to participating banks.
Integrity Management Training
Regarding integrity management training to bank staff, a bank has discretion to decide on the duration and mode of training appropriate for its structure, size and business operations. Topics to be covered should address key aspects of ethical behaviour such as compliance with regulations, conflicts of interest management, customer confidentiality, anti-money laundering measures and corruption prevention safeguards.
Subscription Procedure
For joining the Integrity Charter, a bank needs to appoint an Integrity Officer and ensure that its policies and procedures are comparable to the Model Integrity Policy.
The ICAC accepts subscription applications now.
ICAC’s Dedicated Website
The ICAC has set up an official website (https://cpas.icac.hk/) of the Integrity Charter3. The names of participating banks and materials relating to the Integrity Charter will be available on the official website.
2 Based on these publications of the ICAC: Subscription Guidelines; Model Integrity Policy; FAQs
3 Corruption Prevention Advisory Service - Banking Industry (icac.hk)
