HKMA Communicates Expectations for Preparation Toward Benchmark Reform
HKMA issued a circular to authorized institutions on customer protection in respect of the reform of interest rate benchmarks. In the circular, HKMA reminded authorized institutions to make early preparations for the transition to alternative reference rates, to keep abreast of international and local developments of the reform of interest rate benchmarks, and to take these factors into account in their preparation for the transition. In line with this, HKMA reminded authorized institutions about certain customer protection principles for fair treatment of customers and customer communication and education.
HKMA reminded authorized institutions to uphold customer protection principles in line with the Treat Customers Fairly Charter and other applicable requirements throughout the processes of the reform and transition of interest rate benchmarks. Authorized institutions are reminded to act with due skills, care, and diligence in their approaches to the transition of interest rate benchmarks and when making decisions impacting customers, to reduce conduct risks. Authorized institutions are also reminded to manage the customer impact of the transition ahead of end of 2021, including identifying the extent of their clients’ exposures and ensuring that the associated risks of their clients are assessed and managed.
The circular states that authorized institutions are expected to develop robust customer communication programs for consumer education and outreach. They should be conducted through appropriate channels such as newsletters and frequently asked questions (FAQs). Authorized institutions should also provide customers with appropriate and accessible channels to make enquiries and complaint, and put in place relevant handling mechanisms/procedures, which should be proper and fair. Authorized institutions should also provide sufficient training and up-to-date information to all relevant frontline staff to ensure their relevant staff have adequate knowledge and competence to appropriately handle communications with customers.
Keywords: Asia Pacific, Hong Kong, Banking, Securities, Interest Rate Benchmarks, Conduct Risk, LIBOR, HIBOR, Benchmark Reforms, Alternative Reference Rates, HKMA
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023