HKMA is consulting the banking industry on revisions to the Supervisory Policy Module CG-3 on Code of Conduct, with the comment period closing on April 09, 2021. The proposed revisions have been highlighted in track changes, with key revisions relating to the Application, Oversight by Senior Management, and Internal Control sections of the module. In general, the module sets out the minimum standards that HKMA expects authorized institutions to adopt in respect of their codes of conduct and elements of an effective system for enforcing the Codes.
The policy module applies to all authorized institutions. In the case of locally incorporated authorized institutions, the scope should cover all their branches and subsidiaries subject to the consolidated supervision of HKMA. An overseas-incorporated authorized institution may adopt the Code of Conduct formulated at the group level if it can demonstrate to the satisfaction of HKMA that the relevant group policy is consistent with the requirements set out in this module, or with certain other prescribed conditions. Failure to adhere to the standards and requirements in this module may call into question whether an authorized institution continues to satisfy certain criteria under seventh Schedule to the Banking Ordinance. This module should be read in conjunction with other relevant Supervisory Policy Manual modules, including CG-1 “Corporate Governance of Locally Incorporated Authorized Institutions” in the case of locally incorporated authorized institutions, CG-5 “Guideline on a Sound Remuneration System,” and CG-6 “Competence and Ethical Behavior,” as well as any other applicable guidance issued and updated by HKMA.
Comment Due Date: April 09, 2021
Keywords: Asia Pacific, Hong Kong, Banking, Code of Conduct, Banking Ordinance, Supervisory Policy Manual, Governance, Operational Risk, HKMA
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