HKMA revised the template and completion instructions for the leverage ratio return (Form MA(BS)27); completion instructions for the Return of Stable Funding Position of an authorized institution (Form MA(BS)26)1) and the Return on large exposures (Form MA(BS)28), and the templates for relevant Pillar 3 disclosures. Reporting institutions should submit the three returns based on the revised completion instructions from June 30, 2021. HKMA specified that, to align with the upcoming revision to the submission deadline of the Return of Capital Adequacy Ratio (Form MA(BS)3) and some other returns, the submission deadline of the Form MA(BS)27 will be shortened from six weeks to one month commencing from the reporting position of March 31, 2022. Additionally, the revised disclosure templates will apply to disclosures for any reporting period ending on or after June 30, 2021.
The leverage ratio Form MA(BS)27 collects information on the leverage position of authorized institutions incorporated in Hong Kong; this return should be submitted quarterly. This return and its completion instructions should be read in conjunction with the Banking (Capital) Rules and the relevant supervisory policy or guidance on the capital adequacy (CAR) framework and the leverage ratio framework. For the Return of Stable Funding Position, completion instructions are for category 1 institutions and category 2A institutions to calculate and report the Net Stable Funding Ratio (NSFR) and Core Funding Ratio (CFR), respectively, by using Return MA(BS)26, which is a quarterly return. The large exposures form MA(BS)28) is for the reporting of data under the the Banking (Exposure Limits) Rules (Cap. 155S), which was implemented on July 01, 2019; this return collects information on large exposures of an authorized institution to a single counterparty/group of linked counterparties, non-bank connected parties, and group affiliates.
Finally, the disclosure requirements applicable to the authorized institutions are provided mainly in the Banking (Disclosure) Rules issued of HKMA under section 60A of the Banking Ordinance. All authorized institutions, except for those exempted such as smaller banks, are required to comply with the disclosure requirements. Authorized institutions are required to use the standard HKMA-specified templates under sections 6(1)(ab) and 88(1)(b) of the Banking (Disclosure) Rules to disclose information associated with the Basel regulatory standards.
Keywords: Asia Pacific, Hong Kong, Banking, Reporting, Counterparty Credit Risk, Large Exposures, Pillar 3, Net Stable Funding Ratio, Leverage Ratio, Disclosures, Basel, Regulatory Capital, NSFR, HKMA
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.