Featured Product

    HKMA Publishes Templates for Loss Absorbing Capacity Disclosures

    October 31, 2019

    HKMA issued a set of standard disclosure templates (with accompanying explanatory notes) for the loss-absorbing capacity under the Financial Institutions (Resolution) (Loss-Absorbing Capacity Requirements – Banking Sector) Rules (Cap. 628B)—also known as LAC Rules. The templates are to be used by resolution entities and material subsidiaries for making disclosures under Part 6 of the LAC Rules.

    The standard templates are modeled on the five relevant templates—namely KM2, CCA, TLAC1, TLAC2, and TLAC3—from the BCBS March 2017 publication on Pillar 3 disclosure requirements. The applicability of these templates has been adjusted to reflect that both resolution entities and material subsidiaries are subject to relevant disclosure obligations under the LAC Rules. The standard templates consist of the following:

    • KM2, KM2(A), and KM2(B), reflecting the requirement under rule 47 of the LAC Rules on a resolution entity or a material subsidiary to disclose summary information on its loss-absorbing capacity and, as applicable, that on the non-HK resolution entity
    • CCA(A), reflecting the requirement under rule 51 of the LAC Rules on a resolution entity or a material subsidiary to disclose the main features of its regulatory capital instruments and of other non-capital LAC debt instruments
    • TLAC1 and TLAC1(A), reflecting the requirement under rule 48 of the LAC Rules on a resolution entity or a material subsidiary to disclose the composition of its loss-absorbing capacity
    • TLAC2, reflecting the requirement under rule 50 of the LAC Rules on a material subsidiary to disclose information on its creditor ranking at legal entity level
    • TLAC3, reflecting the requirement under rule 49 of the LAC Rules on a resolution entity to disclose information on its creditor ranking at legal entity level

    In accordance with the LAC Rules, a requirement on a resolution entity or a material subsidiary to make a quarterly or semi-annual disclosure under Part 6 of the LAC Rules applies in relation to each quarterly reporting period or semi-annual reporting period (as the case requires) of the entity (the period ends at least three months after the classification date of the entity). For the requirement under rule 55(4) of the LAC Rules, a resolution entity or a material subsidiary should lodge a copy of its disclosure statement under the Rules with the Resolution Office of HKMA before it publishes the statement. A resolution entity or a material subsidiary is required to submit a copy of the disclosure statement in Portable Document Format to HKMA by e-mail, within three working days after the first publication or exhibition of such information in Hong Kong, for HKMA to keep it with the register maintained under section 20 of the Banking Ordinance (Cap. 155).

     

    Keywords: Asia Pacific, Hong Kong, Banking, Loss Absorbing Capacity, LAC Rules, Resolution, Pillar 3, TLAC, Reporting, Banking Disclosure, Disclosures, BCBS, HKMA

    Featured Experts
    Related Articles
    News

    PRA and FPC Finalize Changes to Leverage Ratio Framework in UK

    The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA

    October 08, 2021 WebPage Regulatory News
    News

    CFPB Proposes Rule on Small Business Lending Data Collection

    The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.

    October 08, 2021 WebPage Regulatory News
    News

    PRA Decides to Maintain O-SII Buffers for Another Year

    The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.

    October 08, 2021 WebPage Regulatory News
    News

    FSB Report Assesses Implementation of Recommendations on Stablecoins

    The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.

    October 07, 2021 WebPage Regulatory News
    News

    APRA Updates Loan Serviceability Expectations for Home Lending

    In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.

    October 06, 2021 WebPage Regulatory News
    News

    CPMI and IOSCO Consult on Guidance on Stablecoin Arrangements

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.

    October 06, 2021 WebPage Regulatory News
    News

    EBA and EIOPA Set Out Work Priorities for 2022

    The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.

    October 05, 2021 WebPage Regulatory News
    News

    MFSA Issues Reporting Updates and Guidance for Banks

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.

    October 05, 2021 WebPage Regulatory News
    News

    EC Publishes Decision on List of Equivalent Third Countries Under CRR

    The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).

    October 04, 2021 WebPage Regulatory News
    News

    EC Rule on Contractual Recognition of Write-Down and Conversion Powers

    EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.

    October 04, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7552