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    HKMA Publishes Regtech Adoption Guide on Reporting and Stress Testing

    November 26, 2021

    The Hong Kong Monetary Authority (HKMA) announced the successful offering of RMB 5 billion offshore renminbi green bonds under the government's Green Bond Program. It also published the fourth issue of the Regtech Adoption Practice Guide, which focuses on regtech solutions designed for regulatory reporting and stress testing. This practice guide provides practical guidance to help banks plan the implementation of regtech solutions and is intended to alleviate the problems encountered in regulatory reporting and stress testing implementation. The guide offers advice on how banks can establish a sustainable and robust governance framework powered by technology to fulfil the evolving reporting and stress testing requirements.

    This particular guide explains how regtech solutions can be used to support regulatory reporting and stress testing, outlines the key challenges that banks in Hong Kong are facing, illustrates the benefits of leveraging regtech solutions for regulatory reporting and stress testing, and describes the key considerations when adopting regtech solutions for regulatory reporting and stress testing. The guide outlines the key implementation components for regulatory reporting and stress testing regtech solutions and shares use cases on the adoption of regtech solutions for regulatory reporting and stress testing. It also outlines the key success factors from successful regtech implementation, from the perspectives of bank and/or the regtech providers. The Regtech Adoption Practice guide series builds on the “Regtech Watch” newsletters to include common industry challenges, guidance on implementation, and examples of what others have done successfully to overcome adoption barriers. The guides supplement other ongoing HKMA initiatives such as the Banking Made Easy initiative, Fintech Supervisory Sandbox, and the Fintech Supervisory Chatroom. 

    The press release on the bond program highlights that the government of the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR government) announced a successful offering of the RMB 5 billion offshore renminbi green bonds under the Government Green Bond Program. The offering comprises the RMB 2.5 billion three-year tranche and the RMB 2.5 billion five-year tranche. The green bonds are being issued under the Global Medium Term Note Program dedicated to green bond issuances established earlier this year. The green bonds will be cleared through the Central Money-markets Unit of HKMA and are expected to be settled on November 30, 2021 and listed on the Hong Kong Stock Exchange and the London Stock Exchange. The green bonds have been assigned credit ratings of AA+ by S&P Global Ratings and AA- by Fitch. The HKSAR government published its Green Bond Framework in 2019, which sets out how green bond proceeds will be used to fund projects that will improve the environment and facilitate the transition to a low-carbon economy.

     

    Keywords: Asia Pacific, Hong Kong, Banking, Securities, Regtech, Fintech, Reporting, Stress Testing, Guidance, Green Bonds, Green Bond Program, ESG, Low-Carbon Economy, Sustainable Finance, HKMA

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