HKMA published two Supervisory Policy Manual modules on Banking (Exposure Limits) Rules (BELR), in the Gazette, as statutory guidelines under section 7(3) of the Banking Ordinance. The Supervisory Policy Manual modules are CR-L-1 on “Consolidated Supervision of Concentration Risks: Banking (Exposure Limits) Rules—Rule 6” and CR-L-5 on “Major Acquisitions and Investments: BELR Part 3.”
The revisions to these two modules are incidental to the implementation of the BELR, which replace the provisions related to exposure limits formerly set out in Part XV of the Banking Ordinance. Most changes to both Supervisory Policy Manual modules are minor in nature such as updates on cross-references (from provisions in the Banking Ordinance to the BELR) and technical details incidental to the BELR implementation (for example, the calculation of tier 1 capital instead of capital base). A more substantial change to CR-L-5 is the elaboration on the new exemptions introduced in the BELR for share acquisitions (that is, acquisition in the insurance business or for trading purposes). These new exemptions were introduced in response to the industry comments received during the making of the BELR.
Keywords: Asia Pacific, Banking, BELR, Supervisory Policy Manual, Concentration Risk, Exposure Limits, Banking Ordinance, Credit Risk, Large Exposures, Basel III, HKMA
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