On 27 Nov 2025, the HKMA published Annex 4 to the Cryptoassets Standard, which provides mandatory disclosure templates for authorized institutions to report on various risk management practices and capital adequacy requirements. The document specifies detailed templates covering credit risk, counterparty credit risk, market risk, liquidity risk, operational risk, and cryptoasset exposures, with specific applicability requirements for banks incorporated in Hong Kong versus those incorporated outside Hong Kong. The templates include specific requirements for cryptoasset exposures, including classification by risk categories and liquidity treatment.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Introduction
On 27 Nov 2025, the Hong Kong Monetary Authority (HKMA) published Annex 4 to the Cryptoassets Standard, which provides detailed disclosure templates and tables for authorized institutions (Als) to use in reporting their risk management practices and capital adequacy requirements. This document specifies mandatory reporting templates for various risk areas, including credit risk, counterparty credit risk, market risk, liquidity risk, operational risk, and cryptoasset exposures, with specific applicability requirements for Als incorporated in Hong Kong versus those incorporated outside Hong Kong.
Mandatory Disclosure Templates
The document outlines a comprehensive set of mandatory disclosure templates covering multiple risk areas. For Als incorporated in Hong Kong, the templates are mandatory across all sections including key prudential ratios (Table OVA, Template KM1, Template OV1), linkages between financial statements and regulatory exposures (Template LI1, Template LI2, Table LIA), composition of regulatory capital (Template CC1, Template CC2, Table CCA), macroprudential supervisory measures (Template GSIB1, Template CCyB1), leverage ratio (Template LR1, Template LR2), liquidity risk (Template LIQ1, Template LIQ2), credit risk (Templates CR1-CR10), counterparty credit risk (Templates CCR1-CCR8), credit valuation adjustment risk (Templates CVA1-CVA4), securitization exposures (Templates SEC1-SEC4), market risk (Templates MR1-MR3), interest rate risk in banking book (Template IRRBBA, Template IRRBB1), remuneration (Templates REM1-REM3), operational risk (Templates OR1-OR3), comparison of modelled and standardized RWAs (Templates CMS1-CMS2), asset encumbrance (Template ENC), and cryptoasset exposures (Templates CAE1-CAE3).
Cryptoasset-Specific Reporting Requirements
The document includes specific templates for cryptoasset exposures (Part XII), requiring Als to report on cryptoasset activities, classification conditions, and risk exposures. Template CAE1 requires disclosure of cryptoasset exposures by classification groups (1a, 1b, 2a, 2b) including credit risk and market risk components, while Template CAE2 specifies accounting classification of cryptoasset exposures. Template CAE3 provides liquidity requirements for cryptoasset exposures for category 1 institutions, detailing HQLA haircuts, inflow rates, and outflow factors for different cryptoasset categories. The document specifies that group 1 cryptoasset exposures must be included in relevant disclosure templates for traditional assets, while group 2 cryptoasset exposures must be reported in specific templates.
Reporting Requirements and Applicability
The document specifies detailed reporting requirements including frequency (annual, semi-annual, quarterly), format (fixed or flexible), and applicability based on the bank's incorporation status and risk profile. For example, Template CC1 (Composition of regulatory capital) is mandatory for all Als incorporated in Hong Kong, while Template GSIB1 (G-SIB indicators) applies only to G-SIBs. The document also specifies that Als must provide accompanying narrative commentary to explain material changes in reporting periods and key drivers of such changes. The templates are designed to align with the HKMA's regulatory framework, including the Banking (Capital) Rules, Banking (Liquidity) Rules, and Banking (Disclosure) Rules.
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