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

    Regulators Fine Goldman Sachs for Risk Management Failures

    FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).

    October 23, 2020 WebPage Regulatory News
    News

    Canada Hosts International Conference of Banking Supervisors

    BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.

    October 22, 2020 WebPage Regulatory News
    News

    FCA Proposes More Measures to Help Insurance Customers Amid Crisis

    FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.

    October 21, 2020 WebPage Regulatory News
    News

    EBA Issues Opinion to Address Risk Stemming from Legacy Instruments

    EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.

    October 21, 2020 WebPage Regulatory News
    News

    ESRB Publishes Non-Bank Financial Intermediation Risk Monitor for 2020

    ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).

    October 21, 2020 WebPage Regulatory News
    News

    HM Treasury Publishes Policy Statement Amending Benchmarks Regulation

    HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.

    October 21, 2020 WebPage Regulatory News
    News

    APRA Initiates Action Against a Bank for Liquidity Compliance Breach

    APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.

    October 21, 2020 WebPage Regulatory News
    News

    PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2

    PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).

    October 20, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Rule to Reduce Impact of Large Bank Failures

    US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).

    October 20, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Rule on Net Stable Funding Ratio Requirements

    US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.

    October 20, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6004