BNM Consults on Pillar 3 Disclosure Requirements for Banks
BNM issued an exposure draft that sets out the minimum requirements on disclosure of key information related to regulatory capital and risk exposures of a financial institution. The disclosure requirements complement the minimum capital and other regulatory requirements, supervisory review process, and financial reporting. Comments are requested by August 10, 2018. The policy document shall come into effect on January 01, 2019 and shall apply to Pillar 3 disclosures for financial years beginning on or after January 01, 2019.
The revised Pillar 3 disclosure requirements introduce common templates to improve consistency and ease of use of disclosures within and across jurisdictions. The use of common template also helps to mitigate the risk of inconsistent formats, which may undermine the objective of enhanced disclosure. The revised requirements have also been designed to be sufficiently granular and detailed to allow meaningful assessments by market participants, yet not requiring disclosure of sensitive or confidential information.The policy document is applicable to licensed banks, licensed investment banks, licensed Islamic banks, and financial holding companies.
This policy document must be read with certain relevant legal instruments and policy documents that have been issued by BNM. These include Capital Adequacy Framework (CAF (CC)); Capital Adequacy Framework for Islamic Banks (referred to as CAFIB (CC)); Capital Adequacy Framework (Basel II – Risk-Weighted Assets/CAF (RWA)); Capital Adequacy Framework for Islamic Banks (CAFIB (RWA)); Corporate Governance; Credit Risk; Investment Account; Leverage Ratio; Liquidity Coverage Ratio; Operational Risk; Reporting Requirements for Interest Rate and Rate of Return Risk in the Banking Book; and Shariah Governance. The policy document supersedes the Risk Weighted Capital Adequacy Framework (Basel II) – Disclosure Requirements (Pillar 3), which were issued on August 01 2010 (CAF (Pillar 3)) and Capital Adequacy Framework for Islamic Banks (CAFIB) – Disclosure Requirements (Pillar 3), which was issued on August 07, 2010 (CAFIB (Pillar 3)).
Related Link: Exposure Draft on Pillar 3 Disclosure (PDF)
Comment Due Date: August 10, 2018
Effective Date: January 01, 2019
Keywords: Asia Pacific, Malaysia, Banking, Pillar 3, Disclosure Requirements, Reporting, Regulatory Capital, BNM
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
BNB Sets Countercyclical Buffer at 1% for Third Quarter of 2020Related Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards