On 15 Nov 2024, the HKMA confirmed that Parts 3 and 5 of the Banking (Capital) (Amendment) Rules 2023, excluding specified transitional sections, will come into force on 1 January 2025. The amendments cover credit risk, output floor, operational risk, sovereign concentration risk, market risk, and CVA risk, with consequential changes to related disclosure, liquidity, and exposure limits rules.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Commencement of Basel III Final Reform Package
On 15 Nov 2024, the Hong Kong Monetary Authority (HKMA) has confirmed the commencement of the Basel III final reform package under the Banking (Capital) (Amendment) Rules 2023 (BCAR), following the expiration of the Legislative Council's 28-day negative vetting period without extension. Parts 3 and 5 of the BCAR, excluding specified transitional sections, will come into force on 1 January 2025.
Scope and Key Regulatory Changes
Part 3 of the BCAR introduces amendments concerning credit risk, the output floor, operational risk, and sovereign concentration risk. Part 5 addresses amendments to market risk and credit valuation adjustment (CVA) risk. Consequential amendments to the Banking (Disclosure) Rules, Banking (Liquidity) Rules, and Banking (Exposure Limits) Rules, relating to the Basel III final reform package, will simultaneously take effect on 1 January 2025. The commencement excludes certain transitional provisions detailed in the Commencement Notice 2024.
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