December 21, 2018

HKMA announced that the negative vetting—by the Legislative Council—of the Banking Exposure Limits Rules (BELR), the Banking Capital Amendment Rules 2018 (BCAR), and the Banking Disclosure Amendment (No. 2) Rules 2018 (BDAR) has now expired. The BELR and BDAR, along with the Banking (Amendment) Ordinance 2018 (Commencement) (No. 2) Notice 2018 (also went through negative vetting by the Legislative Council), will give effect to the 2014 Basel standards on large exposures. From July 01, 2019, these rules in Hong Kong represent local implementation of the large exposures framework of the Basel Committee and supersede obsolete provisions on exposure limits in Pary XV of the Banking Ordinance.

For the BCAR, the dates on which various parts of the provisions will take effect are as follows:

  • Part 4 (except section 34), which is mainly to incorporate the Internal Assessment Approach within the securitization framework, in addition to sections 15 and 16 on revisions to the eligibility criteria for Additional Tier 1 and Tier 2 capital instruments issued by authorized institutions will take effect from January 11, 2019.
  • Part 2 (except sections 15 and 16) in relation to the capital treatment of the holdings by authorized institutions of non-capital loss-absorbing capacity liabilities of financial sector entities will take effect from April 01, 2019.
  • Part 3 and section 34, which is in relation to the capital treatment to address concentrated risk in sovereign exposures and is supplementary to the local implementation of the Basel large exposure framework under the BELR, will take effect from July 01, 2019.


Effective Date: January 11, 2019/April 01, 2019/July 01, 2019

Keywords: Asia Pacific, Hong Kong, Banking, Large Exposures, Banking Ordinance, BELR, BCAR, BDAR, TLAC, HKMA