Featured Product

    HKMA Revises Guideline for Authorization of Virtual Banks in Hong Kong

    May 30, 2018

    HKMA published a revised guideline on the authorization of virtual banks, following the completion of a public consultation. HKMA also published a document on consultation conclusions, which contains detailed summary of comments recieved, along the responses of HKMA. The guideline is issued under section 16(10) of the Banking Ordinance and it sets out the principles that HKMA will consider in deciding whether to authorize virtual banks applying to conduct banking business in Hong Kong.

    Since HKMA announced its intention to encourage virtual banking in Hong Kong last September, it has received inquiries and indications of interests from over 50 companies. For the companies that have not been able to submit a substantially complete application to HKMA by August 31, 2018, they are most unlikely to be included in the first batch of virtual bank applications to be processed by HKMA. In processing these applications, HKMA will prioritize the applicants that can demonstrate the following:

    • They have sufficient financial, technology, and other relevant resources to operate a virtual bank.
    • They have a credible and viable business plan that would provide new customer experience and promote financial inclusion and fintech development.
    • They have developed, or can develop, an appropriate IT platform to support their business plan.
    • They are ready to commence operation soon after a licence is granted.

    During the public consultation, HKMA received submissions from 25 respondents, including the Hong Kong Association of Banks, the DTC Association, the Consumer Council, chambers of commerce, an industry association from the fintech community, technology companies, and professional firms. All respondents supported the introduction of virtual banking in Hong Kong. Most of them agreed that virtual banks should be subject to the same supervisory requirements applicable to conventional banks. No respondents raised objection to allowing both financial and non-financial firms to operate a virtual bank in Hong Kong and there was broad support for virtual banks to operate in the form of a locally incorporated entity with no physical branches. A number of respondents requested HKMA to elaborate on some of the principles contained in the guideline. HKMA has taken on board many of these comments and has made suitable changes to the relevant paragraphs in the guideline. 

    Keywords: Asia Pacific, Hong Kong, Banking, Guideline, Virtual Banks, Fintech, HKMA

    Related Articles
    News

    MAS Concludes Blockchain Payments Prototype Shows Commercial Potential

    MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.

    July 13, 2020 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.10

    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.

    July 10, 2020 WebPage Regulatory News
    News

    APRA Updates Reporting Validation Rules in July 2020

    APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    July 10, 2020 WebPage Regulatory News
    News

    PRA to Partly Apply EBA Guidelines on Disclosures for COVID Measures

    PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.

    July 10, 2020 WebPage Regulatory News
    News

    EBA Updates List of Correlated Currencies Under CRR

    EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.

    July 10, 2020 WebPage Regulatory News
    News

    FASB Proposes to Delay Implementation of Insurance Contracts Standard

    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).

    July 09, 2020 WebPage Regulatory News
    News

    APRA Updates Regulatory Approach to Loan Deferrals Amid COVID Crisis

    APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.

    July 09, 2020 WebPage Regulatory News
    News

    BCBS and FSB Set Out Recommendations for Benchmark Transition

    BCBS and FSB published a report on supervisory issues associated with benchmark transition.

    July 09, 2020 WebPage Regulatory News
    News

    IAIS Sets Out Recommendations for Benchmark Transition for Insurers

    IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.

    July 09, 2020 WebPage Regulatory News
    News

    ESMA Updates Reporting Manual on European Single Electronic Format

    ESMA updated the reporting manual on the European Single Electronic Format (ESEF).

    July 09, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5469