BNM issued an exposure draft that sets out the minimum requirements on disclosure of key information related to regulatory capital and risk exposures of a financial institution. The disclosure requirements complement the minimum capital and other regulatory requirements, supervisory review process, and financial reporting. Comments are requested by August 10, 2018. The policy document shall come into effect on January 01, 2019 and shall apply to Pillar 3 disclosures for financial years beginning on or after January 01, 2019.
The revised Pillar 3 disclosure requirements introduce common templates to improve consistency and ease of use of disclosures within and across jurisdictions. The use of common template also helps to mitigate the risk of inconsistent formats, which may undermine the objective of enhanced disclosure. The revised requirements have also been designed to be sufficiently granular and detailed to allow meaningful assessments by market participants, yet not requiring disclosure of sensitive or confidential information.The policy document is applicable to licensed banks, licensed investment banks, licensed Islamic banks, and financial holding companies.
This policy document must be read with certain relevant legal instruments and policy documents that have been issued by BNM. These include Capital Adequacy Framework (CAF (CC)); Capital Adequacy Framework for Islamic Banks (referred to as CAFIB (CC)); Capital Adequacy Framework (Basel II – Risk-Weighted Assets/CAF (RWA)); Capital Adequacy Framework for Islamic Banks (CAFIB (RWA)); Corporate Governance; Credit Risk; Investment Account; Leverage Ratio; Liquidity Coverage Ratio; Operational Risk; Reporting Requirements for Interest Rate and Rate of Return Risk in the Banking Book; and Shariah Governance. The policy document supersedes the Risk Weighted Capital Adequacy Framework (Basel II) – Disclosure Requirements (Pillar 3), which were issued on August 01 2010 (CAF (Pillar 3)) and Capital Adequacy Framework for Islamic Banks (CAFIB) – Disclosure Requirements (Pillar 3), which was issued on August 07, 2010 (CAFIB (Pillar 3)).
Related Link: Exposure Draft on Pillar 3 Disclosure (PDF)
Comment Due Date: August 10, 2018
Effective Date: January 01, 2019
Keywords: Asia Pacific, Malaysia, Banking, Pillar 3, Disclosure Requirements, Reporting, Regulatory Capital, BNM
Previous ArticleEBA Single Rulebook Q&A: First Update for June 2018
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.
FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.