Featured Product

    HKMA Outlines Consumer Protection Measures for Open API Framework

    October 29, 2019

    HKMA published a circular to clarify its expectations on the consumer protection measures of authorized institutions in respect of the Open Application Programming Interface (Open API) framework. The Annex to the circular lists sound consumer protection practices for Open API Phase II and beyond. To strike a balance between innovation and consumer protection, HKMA emphasizes that authorized institutions should adopt a risk-based approach and implement the consumer protection measures that are commensurate with the risks involved.

    The circular also clarifies the requirements about engagement of intermediaries by the authorized institutions, as the use of third-party service providers under Open API Framework may constitute the use of intermediaries by authorized institutions. For the avoidance of doubt, Simple Redirection Model is not considered as use of intermediaries by authorized institutions and the authorized institutions should still comply with the HKMA-issued applicable requirements for engagement of intermediaries. Authorized institutions should establish clear liability and settlement arrangement with the partnering third-party service providers for compensating customers’ loss arising from unauthorized transactions, with clear upfront communication to customers. They should also and adhere to the principle that a bank customer should not be responsible for any direct loss suffered by him/her as a result of unauthorized transactions conducted through his/her account attributable to the services offered by the third-party service providers using the Open API of authorized institutions, unless the customer acts fraudulently or with gross negligence.

    Authorized institutions are expected to put in place consumer protection measures when implementing the Open API framework. These institutions are expected to uphold consumer protection principles set out in the Code of Banking Practice and comply with other applicable regulatory requirements; this is expected regardless of the underlying technology adopted for the banking products and services and regardless of whether the authorized institutions provide the products and services themselves or in partnership with the third-party service providers.

    Keywords: Asia Pacific, Hong Kong, Banking, Open API Framework, Fintech, Open API Phase II, HKMA

    Related Articles
    News

    EC Rule on Contractual Recognition of Write Down and Conversion Powers

    The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.

    September 17, 2021 WebPage Regulatory News
    News

    APRA Issues Further Guidance on Application of Securitization Standard

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.

    September 16, 2021 WebPage Regulatory News
    News

    SRB Provides Update on Approach to Prior Permissions Regime

    The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.

    September 16, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Finalizes Guidance to Assess Breaches of Large Exposure Limits

    The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.

    September 15, 2021 WebPage Regulatory News
    News

    PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Revises Guidelines on Stress Tests of Deposit Guarantee Schemes

    The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).

    September 15, 2021 WebPage Regulatory News
    News

    Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics

    The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.

    September 15, 2021 WebPage Regulatory News
    News

    HKMA Endorses Industry Guidance to Support LIBOR Transition

    The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).

    September 14, 2021 WebPage Regulatory News
    News

    OCC Issues Booklet on Supervision of Problem Banks

    The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.

    September 13, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7481