HKMA announced that the Banking (Capital) (Amendment) Rules 2020 (BCAR 2020) have been published in the Hong Kong Gazette. The amendments contained in the BCAR 2020 are to implement the two BCBS-issued capital standards for treatment of banks' counterparty credit risk exposures to derivatives trades. These standards are for the standardized approach for measuring counterparty credit risk exposures (SA-CCR) and for the capital requirements for bank exposures to central counterparties. These standards form a part of the Basel III reform package.
These capital standards introduced a new method for measuring the amount of counterparty credit risk incurred by banks from derivative contracts and revised the capital treatment for bank exposures to central counterparties and clearing intermediaries. The BCAR 2020 will be tabled before the Legislative Council for negative vetting on April 29, 2020. Subject to the views of the Legislative Council, the subsidiary legislation should come into operation on June 30, 2021.
Effective Date: June 30, 2021
Keywords: Asia Pacific, Hong Kong, Banking, BCAR, Counterparty Credit Risk, Standardized Approach, Basel III, Derivatives, SA-CCR, Regulatory Capital, HKMA, BCBS
Previous ArticleBundesbank Updates Validation and Plausibility Checks for Reporting
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.
MAS published the guidelines on individual accountability and conduct at financial institutions.
APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.
SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.
FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.
ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.
OSFI published the key findings of a study on third-party risk management.
FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.