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HL Chronicle of Data Protection Privacy & Information Security News & Trends
Posted in Cybersecurity & Data Breaches, International/EU Privacy

New Companies Ordinance to Restrict Access to Personal Data of Directors and Company Secretaries

The Hong Kong Government commenced the rewrite of the Companies Ordinance in 2006 with a view to modernising Hong Kong’s company law. The new Companies Ordinance (the “New Ordinance”, a copy of which can be accessed here) was passed by the Legislative Council on 12 July 2012 and gazetted on 10 August 2012. Among the amendments to be introduced under the New Ordinance are changes relating to the disclosure of personal data of directors and company secretaries contained in documents submitted to the Companies Registry (the “Registry”). It is expected that the New Ordinance will come into effect in the first quarter of 2014.

Under the existing regime, members of the public may access the residential address and full Hong Kong identification number (the “Protected Information“) of directors and company secretaries when conducting a company search upon the payment of a nominal fee. Under the New Ordinance, the Protected Information of directors and company secretaries listed in a document registered with the Registry may be withheld from public inspection. Instead, individuals will be directed to a correspondence address for the relevant director or company secretary.

Protected Information will be automatically withheld if both of the following conditions are satisfied:

(a)   the document was submitted to the registry after the New Ordinance comes into effect; and

(b)   the Protected Information is contained in a part of a document which is required by legislation to contain Protected Information (e.g. in an address field of a form).

For documents submitted to the Registry prior to the New Ordinance taking effect, or for documents (submitted at any time) which contain Protected Information in a part of a document which is not required by legislation to contain Protected Information (e.g. in the margins of a page), directors and company secretaries may submit an application to the Registrar of Companies (the “Registrar“) to withhold the Protected Information, while any other individual may submit an application to withhold their full identity card or passport number.

Only categories of individuals as specified under the Companies (Residential Address and Identification Numbers) Regulation (the “Regulation“) can make an application to the Registrar for the disclosure of Protected Information. The Regulation is yet to be finalised, however the latest draft of the Regulation (available here) provides for the disclosure of Protected Information to the following types of individuals:

(a)   the data subject;

(b)   an individual who has been authorised in writing by the data subject to obtain Protected Information;

(c)   a member of a company who wishes to access Protected Information contained in documents related to that company;

(d)   liquidators and trustees;

(e)   public offers and public bodies; and

(f)    a person specified in the schedule to the Regulation (e.g. insurance brokers and clearing houses etc.).

For anyone not falling into the above categories, Protected Information may only be disclosed pursuant to an order from the Court of First Instance (the draft Regulation states that the Court may make an order for the disclosure of Protected Information if it is satisfied that it is appropriate to do so, or if it is shown that the Protected Information is required in relation to the effective service of documents or the enforcement of a court order).

The Privacy Commissioner for Personal Data (the “Commissioner“) has expressed his support for the draft Regulation, noting that the current regime exposes directors and company secretaries to unwanted marketing approaches and identity fraud. The Commissioner is of the view that personal data privacy will be much enhanced by removing unrestricted public access to the Protected Information of directors and company secretaries, and that the solution proposed by the draft Regulation strikes a balance between the right to privacy and other rights in Hong Kong. However, the reforms are not without opposition, with the Hong Kong Association of Banks and the Hong Kong Journalists Association both voicing their concerns, claiming that the restrictions are not in the public interest and will stifle the free flow of information in Hong Kong.

Following a public consultation which ended in December 2012, the draft Regulation was tabled to the Legislative Council on 7 January 2013, and is expected to be further discussed in the coming months. While the restrictions under the New Ordinance have been finalised, the draft Regulation is still open to amendment and it is possible that the categories of persons who can apply to the Registrar to access Protected Information may be further expanded. It remains to be seen whether the Legislative Council will take heed of the opposition to the reforms and agree to such expansion. Further updates will be forthcoming following finalisation of the Regulation.

 

Gabriela Kennedy (Partner), Hogan Lovells, Hong Kong (gabriela.kennedy@hoganlovells.com); Heidi Gleeson (Registered Foreign Lawyer), Hogan Lovells, Hong Kong (heidi.gleeson@hoganlovells.com); and Godfrey Yuen (Trainee Solicitor), Hogan Lovells, Hong Kong (godfrey.yuen@hoganlovells.com)