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

    EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio

    EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.

    November 19, 2020 WebPage Regulatory News
    News

    ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs

    In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.

    November 19, 2020 WebPage Regulatory News
    News

    IASB Begins First Phase of Post-Implementation Review of IFRS 9

    IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Report Examines Progress in Resolvability of Systemic Institutions

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.

    November 18, 2020 WebPage Regulatory News
    News

    EBA Benchmarks National Insolvency Frameworks Across EU

    EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Reports Assess Impact of Pandemic on Financial Stability

    FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.

    November 17, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Implementation of Capital Review Changes

    RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.

    November 17, 2020 WebPage Regulatory News
    News

    IASB Announces Andreas Barckow as the New Chair from July 2021

    The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.

    November 17, 2020 WebPage Regulatory News
    News

    HKMA Consults on Capital Rules for Bank Equity Investments in Funds

    HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.

    November 17, 2020 WebPage Regulatory News
    News

    ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA

    ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).

    November 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6153