HKMA Revises SPM Modules on Corporate Governance and Risk Management
HKMA published the revised supervisory policy manual (SPM) modules on corporate governance of locally incorporated authorized institutions (CG-1) and risk management framework (IC-1). Revisions to the modules were made to incorporate guidelines issued by BCBS and FSB as well as to update provisions for the board of locally incorporated authorized institutions and its committees.
Authorized institutions will be expected to implement the requirements set out in the revised modules with effect from January 01, 2018. The revised modules provide more elaborate guidance with respect to:
- CG-1. The responsibilities of the board and senior management; the role of the chair and the appropriate composition of independent non-executive directors as members; and the governance issues in group structures, in the case where an authorized institution acts as the parent company or where the authorized institution is a regulatory subsidiary of an overseas-incorporated group.
- IC-1. The key elements of an effective risk management framework, including delineation of the responsibilities of the Board, Risk Committee, and risk management function; the operation of a risk appetite framework and regular formulation of a risk appetite statement to facilitate oversight of risk-taking activities and risk management process; and the maintenance of effective systems and procedures to facilitate firm-wide risk measurement and monitoring.
Effective Date: January 01, 2018
Keywords: Asia Pacific, Hong Kong, Banking, Corporate Governance, Risk Management Framework, SPM, HKMA
Previous Article
EIOPA Q&A on Regulations: Second Update for October 2017Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
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.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
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.