Loans Ordinance


Published: 2014-04-10

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Cap 61 - Loans Ordinance 1

Chapter: 61 Loans Ordinance Gazette Number Version Date

Long title E.R. 2 of 2014 10/04/2014


To make provision for the raising of loans and for matters connected therewith.


[23 May 1975]

(Originally 39 of 1975)

(*Format changes—E.R. 2 of 2014)
__________________________________________________________________________
Note:
* The format of the Ordinance has been updated to the current legislative styles.

Section: 1 Short title E.R. 2 of 2014 10/04/2014


This Ordinance may be cited as the Loans Ordinance.

Section: 2 Interpretation E.R. 2 of 2014 10/04/2014


In this Ordinance, unless the context otherwise requires-
borrow (借入) includes the power to draw upon a credit facility, and includes to borrow within the meaning of section

2A(2); (Amended 7 of 2014 s. 3)
issue (發行), in relation to a bond, promissory note or other instrument in the form described in section 4(1A)(b),

means registering the holding of such bond, note or instrument by the person to whom it is issued by entering the
relevant information or data into the relevant record; (Added 47 of 1991 s. 2)

lender (貸款人) means any person from whom the Government borrows money under this Ordinance.

Section: 2A Meanings of borrow, interest and principal in case of

specified alternative bond scheme
7 of 2014 04/04/2014



(1) This section applies if—
(a) a specified alternative bond scheme is set up—

(i) with the Government as the originator under the specified investment arrangement in the scheme; and
(ii) with a special purpose vehicle, established by the Government, as the bond-issuer under the scheme;

(b) alternative bonds are issued by the bond-issuer under the bond arrangement in the scheme;
(c) bond proceeds from the issue of alternative bonds are received by the bond-issuer under the bond

arrangement;
(d) the Government receives a sum representing the bond proceeds (whether directly from the bond-issuer or

otherwise) under the specified investment arrangement;
(e) the Government agrees to pay certain sums under the specified investment arrangement, which sums are—

(i) to be received by the bond-issuer (whether directly from the Government or otherwise); and
(ii) to be used by the bond-issuer for payment of the redemption payment and additional payments payable

under the bond arrangement; and
(f) the bond arrangement is a qualified bond arrangement and the specified investment arrangement is a

qualified investment arrangement.
(2) In this Ordinance—

(a) the sum received by the Government as mentioned in subsection (1)(d) is regarded as a sum borrowed by
the Government from the bond-issuer; and

(b) references to borrow and principal are to be construed accordingly.
(3) In this Ordinance—

(a) the sums agreed to be paid by the Government as mentioned in subsection (1)(e), if they are to be used for
payment of the additional payments concerned, are regarded as interest agreed to be paid by the



Cap 61 - Loans Ordinance 2

Government on the sum regarded under subsection (2) as being borrowed; and
(b) a reference to interest is to be construed accordingly.

(4) In this section, an expression specified below has the same meaning as it has in Schedule 17A to the Inland
Revenue Ordinance (Cap 112)—
additional payments (額外付款)
alternative bond (另類債券)
bond arrangement (債券安排)
bond-issuer (發債人)
bond proceeds (發債所得)
originator (發起人)
qualified bond arrangement (合資格債券安排)
qualified investment arrangement (合資格投資安排)
redemption payment (贖債付款)
special purpose vehicle (特定目的工具)
specified alternative bond scheme (指明另類債券計劃)
specified investment arrangement (指明投資安排)

(Added 7 of 2014 s. 4)

Section: 3 Power to borrow E.R. 2 of 2014 10/04/2014


(1) The Government may, in such manner and on such terms and subject to such conditions as may be agreed
between the Government and any person, borrow from such person such sum or sums and for such purposes as
may be approved by resolution of the Legislative Council.

(2) Any agreement between the Government and a lender in respect of sums borrowed under the powers conferred
by subsection (1) shall be made in the name of the Government of Hong Kong and may be signed on behalf of
the Government by the Financial Secretary, or by any person authorized by him in writing.

(3) Subject to subsection (4), as soon as practicable after the execution of an agreement under this section, the
Financial Secretary shall cause a copy of the agreement to be laid on the table of the Legislative Council.
(Amended 47 of 1991 s. 3)

(4) The Financial Secretary may, in his absolute discretion, exclude from the application of subsection (3) any
agreement, or any part thereof, which relates to— (Amended 7 of 2014 s. 5)
(a) the issue of any bond, promissory note or other instrument under section 4; or
(b) a borrowing within the meaning of section 2A(2). (Added 47 of 1991 s. 3. Amended 7 of 2014 s. 5)


Section: 4 Power to issue instruments including bonds E.R. 2 of 2014 10/04/2014


(1) The Government may issue such bonds, promissory notes or other instruments on such terms and conditions as
may be necessary for the purpose of giving effect to the terms of any agreement which may be entered into by it
with a lender in respect of any borrowing under this Ordinance.

(1A) A bond, promissory note or other instrument issued by the Government under subsection (1) may take the form
of-
(a) a written document; or
(b) information or data which is recorded (whether by means of a computer or otherwise) in a non-legible form

but is capable of being reproduced in a legible form. (Added 47 of 1991 s. 4)
(2) Any bond, promissory note or other instrument issued by the Government under subsection (1) may, where it is

in the form of a written document, be signed on behalf of the Government by the Financial Secretary or by any
person authorized by him in writing. (Amended 47 of 1991 s. 4)


Section: 5 Appropriation and charge of loans E.R. 2 of 2014 10/04/2014


(1) Any sums borrowed by the Government under this Ordinance shall, except in the case of sums borrowed for the



Cap 61 - Loans Ordinance 3

purposes of the general revenue, be applied and are appropriated to the purposes for which they were borrowed:
Provided that any part of such a sum which cannot be applied to those purposes may be applied to such other
purposes as may be approved by the Financial Secretary.

(2) Where sums borrowed under this Ordinance are not immediately available and expenditure in respect of the
purpose for which they were borrowed must be met, such expenditure shall be charged as an advance pending
reimbursement and the maximum amount which may be so advanced in any financial year in connexion with
any purpose shall be approved by resolution of the Legislative Council.

(3) Any sum borrowed under this Ordinance and all interest and other charges thereon are hereby charged upon and
shall be payable out of the general revenues and assets of Hong Kong.

(4) Any expenses of or incidental to the raising of a loan may be defrayed from the sums borrowed.

Section: 6 Implementation of obligations under agreements E.R. 2 of 2014 10/04/2014


(1) Notwithstanding anything contained in any other law, an agreement concluded with a lender in respect of any
borrowing under this Ordinance and any bond, promissory note or other instrument issued pursuant to any such
agreement and any undertaking given in respect of any such agreement, bond, promissory note or instrument by
the Government shall be valid and enforceable and have full force and effect in accordance with their respective
terms.

(2) The Chief Executive may, by order published in the Gazette, provide for the remission of any tax, duty, charge
or fee payable under any Ordinance in respect of any agreement, bond, promissory note or instrument concluded
with a lender or issued in connexion with any borrowing under this Ordinance or in respect of any payment of
interest or otherwise under any such agreement, bond, promissory note or instrument. (Amended 68 of 1999 s.
3)

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