On 21 Nov 2024, the HKMA issued supervisory highlights for the implementation of the Basel III final reform package, effective 1 January 2025, emphasizing senior management sign-off, comprehensive documentation, internal process updates, staff training, and post-implementation monitoring as critical requirements for authorized institutions. The HKMA noted significant preparatory progress but urged institutions to maintain momentum ahead of the transition deadline.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
SFO, s. 300: Fraudulent & Deceptive Conduct Provisions to Combat Insider Dealing and Other Misconduct
The Court of Appeal decision in Securities and Futures Commission v. Young Bik Fung confirmed that insider dealing as well as other market misconduct could be r
Market Misconduct Tribunal: A Guide to Penalties and Other Consequences for Misuse of Insider Information
Market Misconduct Tribunal proceedings for mishandling of insider information can result in fines and disgorgement orders
SPOTLIGHT ON
FAMILY OFFICES
Introduction and Implementation Timeline
On 21 Nov 2024, the Hong Kong Monetary Authority (HKMA) issued supervisory highlights regarding the implementation of the Basel III final reform package (B3F), noting that revised capital standards will take effect on 1 January 2025. The HKMA reports significant preparatory progress by authorized institutions (Als), including completion of user acceptance testing for regulatory reporting systems, and outlines key supervisory expectations for final transition readiness.
Senior Management Oversight Requirements
Als must obtain formal senior management sign-off prior to rolling out B3F-related system, model, control, and process changes. This sign-off is mandated to demonstrate accountability, ensure capacity building, and confirm effective oversight of the implementation, as the B3F necessitates substantial operational modifications.
Documentation and Audit Trail Obligations
Als are required to maintain comprehensive documentation of all B3F implementation actions, including system changes, model developments, control process redesigns, and policy revisions. All reviews, testing, and approvals must be properly recorded to enable demonstrable compliance with regulatory standards during internal or external audits.
Internal Process Alignment
Als must conduct thorough reviews of internal processes beyond regulatory reporting—such as capital adequacy assessment, stress testing, management information reporting, and capital planning—to identify and implement necessary updates ensuring ongoing compliance with the revised capital framework.
Staff Training and Post-Implementation Monitoring
Als must provide adequate staff training to familiarize employees with revised capital standards and their impact on existing workflows, enabling continued effective discharge of responsibilities. Post-implementation, Als are required to perform ongoing monitoring of new/upgraded systems, models, and controls to verify intended outcomes and sustained compliance.
View the full article:Source
