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July 09, 2018

HKMA announced that the negative vetting of the Banking (Exposure Limits) Rules by the Legislative Council has expired and the rules will come into operation from July 13, 2018. To supplement the implementation of the rules, HKMA also published the revised Return of Certificate of Compliance with Banking Ordinance (Form MA(BS)1F(a) or Annex 1) and the accompanying Completion Instructions (Annex 2). HKMA also published in the form of instructions the expedient reporting arrangements (Annex 3) for authorized institutions that start to comply with the revised equity exposure limit set out in the Banking (Exposure Limits) Rules (the Rules) from July 13, 2018.

The rules primarily replace the equity exposure limit under section 87 of the Banking Ordinance. Earlier, HKMA had consulted locally incorporated authorized institutions regarding their readiness to comply with the revised limit. An authorized institution that has opted for complying with the rules starting from January 01, 2019 will receive notification on the detailed arrangements individually soon. Other authorized institutions, that is, ones which have opted for immediate switching should start to comply with the revised equity exposure limit in the rules from July 13, 2018.

The revisions primarily seek to replace, as appropriate, references to the Banking Ordinance that have been made obsolete by the implementation of the rules and to add a new reporting field on tier 1 capital. Changes from the current return in use are highlighted for ease of reference. HKMA believes that these minor changes should not cause reporting difficulties. All authorized institutions, whether subject to individual notification of special arrangements or not, should use the revised Certificate for statutory reporting purposes starting from the reporting period ended September 2018. HKMA will notify institutions separately when the electronic files for the revised Certificate and its accompanying Completion Instructions are available.


Effective Date: July 13, 2018

Keywords: Asia Pacific, Hong Kong, Banking, Reporting, Large Exposures, Concentration Risk, Equity Exposures, BAO 2018, HKMA

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