On 13 Dec 2024, the HKMA published supplementary Q&As to clarify the implementation of the Banking (Capital) Rules (BCR) for the revised credit risk framework. The guidance, intended for authorized institutions, provides non-legal explanations of the BCR's application but explicitly states it is not a comprehensive summary, does not replace legal advice, and the BCR itself prevails. The HKMA will update the Q&As in response to implementation experiences and Basel Framework developments.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Introduction and Purpose of Q&As
On 13 Dec 2024, the Hong Kong Monetary Authority (HKMA) issued supplementary guidance in the form of Questions and Answers (Q&As) on the Banking (Capital) Rules (BCR) concerning the revised credit risk framework. These Q&As, designed in non-legal language, provide practical implementation guidance for authorized institutions (AIs) on specific sections of the BCR, which are subsidiary legislation under the Banking Ordinance and have undergone negative vetting by the Legislative Council. The guidance clarifies the HKMA's approach to implementation but explicitly states it is not a comprehensive summary of the BCR, does not replace legal advice, and the BCR itself prevails over any discrepancies.
Scope and Limitations of Guidance
The Q&As address matters arising from the consultation and rule-making processes for the BCR, the HKMA's responses to common enquiries from AIs, ongoing developments in the Basel Framework, and relevant Basel Committee on Banking Supervision (BCBS) guidance. The HKMA emphasizes that the Q&As are general in scope and do not account for individual AI circumstances or exceptions within the BCR. AIs are advised to seek legal and professional advice before acting on matters covered by the Q&As, as the guidance is not a substitute for reviewing the full BCR text. The HKMA will review the practical implementation of the BCR and Basel Framework updates, revising the Q&As as necessary.
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