HKMA Announces Publication of Amendments to the Banking Ordinance 2018
HKMA announced that the Banking Exposure Limits Rules (BELR), the Banking Capital Amendment Rules 2018 (BCAR), and the Banking Disclosure Amendment) (No. 2) Rules 2018 (BDAR) have been gazetted. These gazetted rules implement the recent international standards on banking regulation in Hong Kong. The three pieces of subsidiary legislation will be tabled before the Legislative Council for negative vetting on November 21, 2018. Subject to the views of the Legislative Council, the subsidiary legislation should come into operation.
BELR. The BELR replaces the existing Banking Exposure Limits Rules (containing an equity exposure limit) and other exposure limits in Part XV of the Banking Ordinance. The BELR implements the 2014 Basel standards on Supervisory framework for measuring and controlling large exposures.
BCAR. The amendments in the BCAR mainly incorporate, into the Banking Capital Rules, the 2016 Basel standard on total loss-absorbing capacity (TLAC) holdings, a capital treatment to address concentration risk in sovereign exposures supplementary to the implementation of the BELR, and the “internal assessment approach” of the 2014 Basel III Document on revisions to the securitization framework; the revisions to the securitization framework, which is a methodology for calculating capital requirement designed for certain securitization exposures in asset-backed commercial paper programs. HKMA also specified the HKMC Insurance Limited and the HKMC Annuity Limited as domestic public-sector entities for preferential capital treatment under the Banking Capital Rules to cater for the business restructuring of the Hong Kong Mortgage Corporation Limited and to introduce certain miscellaneous amendments to enhance the consistency and clarity of certain provisions in the Banking Capital Rules.
BDAR. The Disclosure rules contain a minor consequential adjustment to the definition of “capital requirements” to align with the capital treatment to address concentration risk in sovereign exposures (as referred to in BCAR).
The amendments in the BCAR other than those in relation to TLAC holdings and concentration risk in sovereign exposures come into operation on January 11, 2019. April 01, 2019 is the effective date for amendments in the BCAR in relation to TLAC holdings while July 01, 2019 is the effective date for the BELR, the BDAR, and amendments in the BCAR in relation to concentration risk in sovereign exposures.
Effective Date: January 11, 2019/April 01, 2019/July 01, 2019
Keywords: Asia Pacific, Hong Kong, Banking, Banking Ordinance, Large Exposures, Disclosures, TLAC, ABCP Securitization, Hong Kong Government, HKMA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Dieter Van der Stock
IFRS subject matter expert; accounting authority; risk management specialist
Previous Article
IASB Issues Work Plan and Meeting Updates for November 2018Related Articles
News
APRA Publishes Proposal to Increase Transparency of Banking DataAPRA proposed to substantially increase the volume and breadth of data it makes publicly available on authorized deposit-taking institutions, including banks, credit unions, and building societies.
December 05, 2019
WebPage
Regulatory News
|
News
ESMA Consults on Guide to Internal Controls for Credit Rating AgenciesESMA launched a consultation on the guidelines on internal controls for credit rating agencies (CRAs).
December 05, 2019
WebPage
Regulatory News
|
News
EU Finalizes Directive and Prudential Rules for Investment FirmsEU published, in the Official Journal of the European Union, the Directive (2019/2034) and Regulation (2019/2033) on the prudential requirements and supervision of investment firms.
December 05, 2019
WebPage
Regulatory News
|
News
OSFI Revises Guideline on Principles for Management of Liquidity RiskOSFI finalized Guideline B-6 on the principles for the management of liquidity risk.
December 05, 2019
WebPage
Regulatory News
|
News
PRA Consults on Framework to Manage Outsourcing and Third-Party RiskPRA published a consultation paper CP30/19 that sets out proposals to modernize the regulatory framework on outsourcing and third-party risk management.
December 05, 2019
WebPage
Regulatory News
|
News
BoE, PRA, and FCA Consult to Strengthen Operational ResilienceBoE, PRA, and FCA published a shared policy summary and coordinated consultation papers on new requirements to strengthen operational resilience in the financial services sector.
December 05, 2019
WebPage
Regulatory News
|
News
EC Amends Rule on Mapping of External Credit Assessment InstitutionsEC published the implementing regulation (EU) 2019/2028, which amends Regulation 2016/1799, regarding the mapping tables specifying correspondence between the credit risk assessments of external credit assessment institutions (ECAIs) and the credit quality steps set out in the Capital Requirements Regulation.
December 04, 2019
WebPage
Regulatory News
|
News
EBA Issues Second Part of Advice on Implementation of Basel III in EUEBA published the second part of its advice on the implementation of Basel III in EU, which complements the report published on August 05, 2019.
December 04, 2019
WebPage
Regulatory News
|
News
EU Approves European Council Proposal on CCP Recovery and ResolutionEU ambassadors approved the position of European Council on a proposed framework for clearing houses and their authorities to prepare for and deal with financial difficulties.
December 04, 2019
WebPage
Regulatory News
|
News
OSFI Releases Guideline on Foreign Bank Branch Deposit RequirementsOSFI released the final version of Guideline A-10 on foreign bank branch deposit requirements, along with guideline impact analysis statement.
December 04, 2019
WebPage
Regulatory News
|