May 08, 2019

HKMA is consulting on multiple modules of Supervisory Policy Manual, including modules on corporate governance, credit risk management, credit exposure limits, and disclosures. The Supervisory Policy Manual of HKMA sets out the latest supervisory policies and practices, the minimum standards authorized institutions are expected to attain to satisfy the requirements of the Banking Ordinance, and the recommendations on best practices that authorized institutions should aim to achieve.

HKMA is consulting on the following modules of the Supervisory Policy Manual:

  • CA-D-1 Guideline on the Application of the Banking (Disclosure) Rules. This module offers interpretative guidance to authorized institutions on the application of the Banking (Disclosure) Rules (Cap. 155M).
  • CG-5 Guideline on a Sound Remuneration System. This module provides guidance to authorized institutions on the key elements of a sound remuneration system, sets out approach that HKMA will adopt in the supervision of authorized institutions’ remuneration systems, and outlines the level and type of remuneration-related disclosures to be made by authorized institutions. This consultation is scheduled to close on June 16, 2019.
  • CR-G-8 Large Exposures and Risk Concentrations. This module sets out the minimum standards and requirements that authorized institutions are expected to follow and describes how HKMA proposes to exercise its supervisory powers, in relation to controls on large exposures and risk concentrations.
  • CR-G-9 Exposures to Connected Parties. This module specifies systems and controls that authorized institutions should have to identify, measure, monitor, and control their exposures to connected parties (including those covered under Part 8).
  • CR-L-1 Consolidated Supervision of Concentration Risks under Banking (Exposure Limits) Rules: Rule 6. This module sets out general principles governing the application of consolidated supervision of concentration risks and explains how HKMA will apply these principles.
  • CR-L-3 Letters of Comfort: Rule 57(1)(d). This module specifies the criteria that HKMA applied in assessing the acceptability of letters of comfort for large exposure purposes and the factors taken into account in setting and renewing limits for such letters.
  • CR-L-4 Underwriting of Securities: Banking (Exposure Limits) Rules. This module explains the policy of HKMA toward the underwriting and sub-underwriting of securities by authorized institutions in relation to Parts 2, 3, and 7 of the Banking (Exposure Limits) Rules.
  • CR-L-5 Major Acquisitions and Investments: Part 3 of Banking (Exposure Limits) Rules. This module sets out the way HKMA will exercise the powers of consent or approval under Part 3 of Banking (Exposure Limits) Rules.

 

Comment Due Date: June 16, 2019 (CG-5)

Keywords: Asia Pacific, Banking, Governance, BELR, Supervisory Policy Manual, Credit Risk, Concentration Risk, Large Exposures, Disclosures, Remuneration, HKMA

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