Featured Product

    HKMA Consults on Draft Stay Rules on Financial Contracts Under FIRO

    December 31, 2020

    HKMA is consulting, until January 31, 2021, on the draft rules on contractual stays on termination rights in financial contracts for authorized institutions (Stay Rules) to be made under the Financial Institutions (Resolution) Ordinance (Cap. 628)—also known as FIRO. HKMA also released conclusion to its consultation on the Stay Rules that were published in January 2020. After reviewing feedback from the consultation, HKMA has adopted appropriate refinements in developing the draft Stay Rules. In addition, HKMA published a consultation on the revised Supervisory Policy Manual module (IC-6) that specifies the minimum standards that authorized institutions should observe in relation to the sharing and use of consumer credit data through credit reference agencies; this consultation is open until February 01, 2021.

    In response to the January consultation on Stay Rules, HKMA had received a total of 14 submissions from industry associations, professional associations, banks, an accounting firm, and law firms. All respondents indicated broad support for the proposed approach to the Stay Rules and provided constructive comments on the proposals set out in the consultation paper. Some sought additional clarity on the details of the proposals in the consultation paper. The Stay Rules require authorized institutions incorporated in Hong Kong and certain of their group companies to include an appropriate provision in certain non-Hong Kong law governed financial contracts to the effect that the parties to the contracts agree to be bound by a temporary suspension of termination rights that may be imposed by HKMA under section 90 of the FIRO.

    The Stay Rules are designed to address the cross-border risks to orderly resolution arising from the early termination of financial contracts governed by non-Hong Kong law, in line with the contractual approach to giving effect to cross-border resolution actions advocated by FSB. It is intended to introduce the Stay Rules into the Legislative Council for negative vetting within the current legislative year of 2020-21, with a view to bringing the Stay Rules into operation shortly after the completion of the vetting process in 2021.

     

    Comment Due Date: January 31, 2021/February 01, 2021

    Keywords: Asia Pacific, Hong Kong, Banking, Securities, Stay Rules, FIRO, Financial Contract, Resolution Framework, FSB, HKMA

    Related Articles
    News

    EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0

    EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.

    April 08, 2021 WebPage Regulatory News
    News

    MAS Amends Notice on Related Party Transactions of Banks

    MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.

    April 08, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Euro Short-Term Rate

    ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.

    April 07, 2021 WebPage Regulatory News
    News

    EBA Consults on Standards Related to FRTB-SA

    EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).

    April 07, 2021 WebPage Regulatory News
    News

    PRA Proposes Rules Related to IRB Approach for Credit Risk

    PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.

    April 07, 2021 WebPage Regulatory News
    News

    BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK

    The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks

    FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks

    OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.

    April 06, 2021 WebPage Regulatory News
    News

    EU Amends CRR and Securitization Regulation in Response to Pandemic

    To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).

    April 06, 2021 WebPage Regulatory News
    News

    HM Treasury Announces G7 Agreement on Green Agenda Ahead of COP26

    HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.

    April 06, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6821