Featured Product

    HKMA Issues Note on LIBOR Transition and Proposal on Resolution Regime

    July 09, 2021

    The Hong Kong Monetary Authority (HKMA) is consulting the banking industry on the draft Section 196 of the Financial Institutions (Resolution) Ordinance (Cap. 628) (FIRO) Code of Practice Chapter ST-1 on contractual recognition of suspension of termination rights. Chapter ST-1 aims to provide guidance on how the Resolution Authority intends to exercise certain discretionary powers under, and on the operation of certain provisions in, the Financial Institutions (Resolution) (Contractual Recognition of Suspension of Termination Rights – Banking Sector) Rules (also known as the Stay Rules). The consultation period ends on September 09, 2021. Additionally, HKMA published a circular announcing that it has updated the explanatory note on LIBOR transition for authorized institutions, which HKMA expects the authorized institutions to share with the relevant corporate customers by July 31, 2021

    The note is intended to give a further push to promote the corporate sector’s awareness of the LIBOR transition. HKMA and the Treasury Market Association (TMA) jointly developed and published is leaflet in July 2020. The leaflet a self-explanatory note about LIBOR transition in the form of questions and answers (Q&A) to impress upon corporates the need to make early preparations. Institutions distributed this note to the corporate customers in the third quarter of 2020. Overseas authorities have now confirmed that most LIBOR settings will be discontinued starting from January 01, 2022. To ensure a smooth transition, bank regulators worldwide, including HKMA, have required banks to cease entering into new LIBOR contracts after 2021. Given the recent developments, HKMA and the TMA have updated the Q&A and developed a leaflet to enhance awareness of corporate sector on the transition and its implications for them. HKMA is now requesting institutions to distribute the enclosed leaflet to all their corporate customers that have outstanding LIBOR-linked contracts with them by July 31, 2021. The leaflet states that bank customers will have to reference alternative interest rates in any new contracts with banks from January 01, 2022 onward.

     

    Comment Due Date: September 09, 2021

    Keywords: Asia Pacific, Hong Kong, Banking, LIBOR, FIRO, Benchmark Reforms, Corporates, Resolution Framework, Resolution Planning, Chapter ST-1, Contractual Recognition, Stay Rules, HKMA

    Related Articles
    News

    EC to Defer Application of SFDR Standards Till July 2022

    The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.

    July 23, 2021 WebPage Regulatory News
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Publishes Methodological Guide to Mystery Shopping

    The European Banking Authority (EBA) published a methodological guide to mystery shopping.

    July 21, 2021 WebPage Regulatory News
    News

    APRA Issues Update on Capital Reform Policy Settings for Banks

    The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.

    July 21, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.

    July 21, 2021 WebPage Regulatory News
    News

    ESMA Responds to Proposal Related to Sustainability Standards Board

    The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.

    July 21, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7284