Featured Product

    HKMA Consults on Guidance on Operational Continuity in Resolution

    February 01, 2021

    HKMA published a consultation on a chapter of the Code of Practice on operational continuity in resolution, or OCIR, under the Financial Institutions (Resolution) Ordinance (Cap. 628)—also known as FIRO. The consultation sets out expectations regarding the ex-ante arrangements that authorized institutions should put in place to secure continuity in resolution. This continuity is with respect to services that are essential to the continued performance of critical financial functions and to support the post-stabilization restructuring in a timely manner. The draft text also provides guidance to authorized institutions on the HKMA approach to resolution planning and resolvability assessment (including the removal of impediments to orderly resolution) in the context of operational continuity in resolution. The consultation is open until April 01, 2021.

    As part of the bilateral resolution planning program, HKMA expects an authorized institution to be able to demonstrate that it has assessed the risks to the operational continuity in resolution and that appropriate arrangements to mitigate these risks are in place or being put in place. The consultation also explains the relationship between critical financial functions, essential services, and preferred resolution strategies. It describes the models typically adopted by authorized institutions for provision of essential services. Additionally, the consultation discusses the matters an authorized institution is expected to consider and address when putting in place the operational continuity in resolution arrangements. The consultation finally sets out the approach of HKMA to implementing these expectations.

    If an authorized institution does not meet the expectations, HKMA may form the opinion that a significant impediment (in relation to the operational continuity in resolution) exists to the orderly resolution of the authorized institution. HKMA may direct the authorized institution to take any measures in relation to its structure (including group structure), operations (including intra-group dependencies), assets, rights, or liabilities that are, in the opinion of HKMA, reasonably required to remove or mitigate the effect of this impediment. The resolution regime under the FIRO reflects the importance of the operational continuity in resolution and empowers HKMA to take appropriate action to support the operational continuity in resolution. In performing, or in considering performing, functions under the FIRO, HKMA must have regard to the resolution objectives. HKMA will consider the operational continuity in resolution when conducting resolution planning and devising strategies for securing an orderly resolution of an authorized institution (or a holding company of the authorized institution) and developing resolution plans to support such strategies. HKMA will also consider t he operational continuity in resolution when conducting a resolvability assessment of an authorized institution (or a holding company of the authorized institution), to determine whether there are any impediments to its orderly resolution.

     

    Comment Due Date: April 01, 2021

     

    Keywords: Asia Pacific, Hong Kong, Banking, FIRO, Resolution Framework, Operational Continuity, Resolution Planning, Resolvability Assessment, OCIR, HKMA

    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    News

    BaFin Consults on Resolvability Requirements for Resolution Planning

    The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.

    June 10, 2022 WebPage Regulatory News
    News

    EBA Consults on Certain Standards and Guidelines Under CRR and BRRD

    The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.

    June 08, 2022 WebPage Regulatory News
    News

    OJK Publishes Regulatory Updates for Financial Sector Entities

    The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)

    June 03, 2022 WebPage Regulatory News
    News

    EU Publishes Rules on DLT and Data Governance

    The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).

    June 03, 2022 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Reporting Framework 3.2

    The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications

    June 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8267