HSBC 2003 Annual Report Download - page 36

HSBC HOLDINGS PLC
Regulation and Supervision (continued)
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have limited terms but are renewable, and are
revocable for cause. Failure to comply with
applicable laws and regulations may limit the ability
of these licensed lenders to collect or enforce loan
agreements made with consumers and may cause the
consumer lending subsidiary to be liable for damages
and penalties.
HSBC’s US credit insurance operations are
subject to regulatory supervision under the laws of
the states in which they operate. Regulations vary
from state to state but generally cover licensing of
insurance companies; premiums and loss rates;
dividend restrictions; types of insurance that may be
sold; permissible investments; policy reserve
requirements; and insurance marketing practices.
Certain US source payments to foreign persons
may be subject to US withholding tax unless the
foreign person is a qualified intermediary. A qualified
intermediary is a financial intermediary who is
qualified under the Internal Revenue Code and has
completed the Qualified Intermediary Withholding
Agreement with the Internal Revenue Service.
Various HSBC operations outside the US are
qualified intermediaries.