October 20, 2017

The Banking (Capital) (Amendment) Rules 2017 (BCAR 2017), the Banking (Liquidity) (Amendment) Rules 2017 (BLAR 2017), and the Banking (Specification of Multilateral Development Bank) (Amendment) Notice 2017 (Amendment Notice 2017) were published in the Gazette to implement certain recent international standards on banking regulation in Hong Kong.

  • BCAR 2017. The amendments contained in the BCAR 2017 are to implement three Basel III-related capital standards of BCBS. These include the revised securitization framework, the leverage ratio framework, and the interim capital treatment of expected loss provisions under Hong Kong Financial Reporting Standard (HKFRS) 9 (in line with the new International Financial Reporting Standard 9).
  • BLAR 2017. BLAR 2017 aims to implement the Basel III net stable funding ratio and a new local Core Funding Ratio to different categories of authorized institutions, with regard to their business size and liquidity risk profile, to ensure that their assets are financed with a sufficiently stable source of funding.
  • Amendment Notice 2017. The Amendment Notice seeks to implement the BCBS decision of November 2016 to allow banks to apply a 0% risk-weight to claims on the International Development Association (a member of the World Bank Group) as a multilateral development bank (MDB) under the standardized approach for credit risk. The opportunity is also taken to incorporate the Chinese names of certain MDBs in the existing Notice.

The three pieces of subsidiary legislation will be tabled before the Legislative Council for negative vetting on October 25, 2017. Subject to the views of the Legislative Council, the subsidiary legislation should come into operation on January 01, 2018. These rules seek mainly to implement the Basel III-related capital and liquidity standards that are scheduled to take effect from January 01, 2018, in accordance with the international timeline.

Keywords: Asia Pacific, Hong Kong, Banking, BCAR, BLAR, IFRS 9, Securitization Framework, HKMA

Related Articles
News

BIS Report Discusses Regulatory Issues Related to Big Techs in Finance

BIS has pre-released a chapter of the BIS Annual Economic Report; this chapter focuses on the risks and opportunities presented by large technology firms (big techs) in the financial services sector.

June 23, 2019 WebPage Regulatory News
News

IOSCO Report Examines Liquidity in Corporate Bond Markets

IOSCO published a report that examines the factors affecting liquidity, under stressed conditions, in the secondary corporate bond markets.

June 21, 2019 WebPage Regulatory News
News

FED Publishes Results of the 2019 Stress Tests for Banks

FED published a report presenting results of the Dodd-Frank Act Stress Test (DFAST) exercise for 2019.

June 21, 2019 WebPage Regulatory News
News

BCBS Report Examines Global Pillar 2 Supervisory Review Practices

BCBS published a report that examines the Pillar 2 supervisory review practices and approaches in Basel member jurisdictions.

June 21, 2019 WebPage Regulatory News
News

IASB Publishes Work Plan and Meeting Updates for June 2019

IASB published an updated work plan and a summary of its June meeting, which presents preliminary decisions of the Board.

June 21, 2019 WebPage Regulatory News
News

HKMA Publishes Banking Exposure Limits Code Under Banking Ordinance

HKMA issued a circular to all authorized institutions informing that the Banking (Exposure Limits) Code has been published in the Gazette on June 21, 2019.

June 21, 2019 WebPage Regulatory News
News

OSFI Proposes Guideline on Internal Model Oversight for Insurers

OSFI proposed the draft guideline E-25 on the internal model oversight framework for federally regulated property and casualty (P&C) insurance companies.

June 21, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for June 2019

Under the Single Rulebook question and answer (Q&A) updates for this week, EBA published one answer regarding the calculation of institution-specific countercyclical capital buffer rates.

June 21, 2019 WebPage Regulatory News
News

BCBS Publishes Summary of the Meeting in June 2019

BCBS published a summary of its June meeting in Basel.

June 20, 2019 WebPage Regulatory News
News

OCC Bulletin on Risk Management Guidance for Home Mortgage Lending

OCC published Bulletin 2019-28 on risk management guidance for higher-loan-to-value (LTV) lending activities in communities targeted for revitalization.

June 19, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3298