HKMA Announcement on Timeline for Implementation of Market Risk Rules

By Regulatory News

December 17, 2019

Regulatory Capital, Basel III

HKMA announced that it will closely monitor the progress across major jurisdictions on the implementation of market risk capital requirements and finalize the timeline for Hong Kong when there is more clarity on the implementation status internationally. In a letter addressed to the Chief Executives of locally incorporated authorized institutions, HKMA also announced that, early next year, it will conduct a local quantitative impact study (QIS) on locally incorporated authorized institutions to assess the impact of the new standards for Hong Kong.

According to the latest BCBS timetable, banks would be required to calculate their market risk based on the new standards from January 01, 2022. However, the regulator understands the concern of the industry about the challenges arising from different implementation timelines across major jurisdictions. To address this, HKMA will closely monitor the progress in these jurisdictions and finalize timeline for Hong Kong when there is more clarity on the implementation status internationally. In the meantime, as a transitional arrangement, locally incorporated authorized institutions will be required to implement the new market risk framework in Hong Kong for reporting purposes only by January 01, 2022.

Keywords: Asia Pacific, Hong Kong, Banking, Market Risk, Regulatory Capital, Basel III, BCBS, HKMA

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