HKMA issued a circular to authorized institutions on customer protection in respect of the reform of interest rate benchmarks. In the circular, HKMA reminded authorized institutions to make early preparations for the transition to alternative reference rates, to keep abreast of international and local developments of the reform of interest rate benchmarks, and to take these factors into account in their preparation for the transition. In line with this, HKMA reminded authorized institutions about certain customer protection principles for fair treatment of customers and customer communication and education.
HKMA reminded authorized institutions to uphold customer protection principles in line with the Treat Customers Fairly Charter and other applicable requirements throughout the processes of the reform and transition of interest rate benchmarks. Authorized institutions are reminded to act with due skills, care, and diligence in their approaches to the transition of interest rate benchmarks and when making decisions impacting customers, to reduce conduct risks. Authorized institutions are also reminded to manage the customer impact of the transition ahead of end of 2021, including identifying the extent of their clients’ exposures and ensuring that the associated risks of their clients are assessed and managed.
The circular states that authorized institutions are expected to develop robust customer communication programs for consumer education and outreach. They should be conducted through appropriate channels such as newsletters and frequently asked questions (FAQs). Authorized institutions should also provide customers with appropriate and accessible channels to make enquiries and complaint, and put in place relevant handling mechanisms/procedures, which should be proper and fair. Authorized institutions should also provide sufficient training and up-to-date information to all relevant frontline staff to ensure their relevant staff have adequate knowledge and competence to appropriately handle communications with customers.
Keywords: Asia Pacific, Hong Kong, Banking, Securities, Interest Rate Benchmarks, Conduct Risk, LIBOR, HIBOR, Benchmark Reforms, Alternative Reference Rates, HKMA
Previous ArticleHKMA Grants Another Banking License
The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.
The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.
The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.