On 24 Oct 2024, the HKMA published revised Pillar 3 Disclosure Templates and Tables to enhance transparency and standardize reporting requirements for authorized institutions in Hong Kong. The revised package updates existing disclosure templates across 11 key risk categories, specifying detailed requirements for quantitative data and qualitative explanations, with mandatory frequencies ranging from annual to quarterly disclosures. The revisions align with Basel III standards while incorporating Hong Kong-specific regulatory requirements for capital treatment, risk-weighting, and disclosure formats.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
Opening Bank Accounts: Duties of Banks in Hong Kong to Combat Tax Evasion
Hong Kong money laundering laws require banks to assess the risk of tax evasion in evaluating bank account opening applications. Prospective customers applying
Opening a Bank Account in Hong Kong: Latest Regulatory Developments
For many new businesses, opening a bank account is a mission critical task. Unfortunately, as a result of significant growth in laws intended to combat money l
SPOTLIGHT ON
FAMILY OFFICES
Revised Disclosure Templates and Tables
On 24 Oct 2024, the Hong Kong Monetary Authority (HKMA) published a revised version of its Pillar 3 Disclosure Package, specifically Annex 2 titled 'Disclosure Templates and Tables (Marked-up version)'. This revision updates existing disclosure templates and tables for authorized institutions (Als) incorporated in Hong Kong, providing detailed requirements for financial reporting under the Banking (Capital) Rules, Banking (Liquidity) Rules, and Banking (Disclosure) Rules. The revised templates aim to enhance transparency and standardize reporting across various risk categories including credit risk, counterparty credit risk, market risk, and operational risk.
Key Components of the Revised Disclosure Package
The revised package includes 11 main sections covering comprehensive disclosure requirements across multiple risk categories. Section I focuses on key prudential ratios and risk management overview (Templates KM1 and OVA), while Section II details linkages between financial statements and regulatory exposures (Templates LI1, LI2, and LIA). Section III provides composition of regulatory capital (Templates CC1, CC2, and CCA), and Section IV covers macroprudential supervisory measures (Templates GSIB1 and CCyB1). Section V addresses leverage ratio requirements (Templates LR1 and LR2), Section VI covers liquidity risk (Templates LIQ1 and LIQ2), and Sections VII through XI address credit risk, counterparty credit risk, credit valuation adjustment risk, securitization exposures, market risk, interest rate risk in banking book, remuneration, operational risk, comparison of modelled and standardized RWAs, and asset encumbrance respectively.
Regulatory Requirements and Implementation
The revised templates specify detailed requirements for Als incorporated in Hong Kong, including mandatory disclosure frequencies (annual, semi-annual, or quarterly), format requirements (fixed or flexible), and content specifications. The templates require Als to provide both quantitative data and qualitative explanations for material changes in reporting periods. The HKMA emphasizes that the revised templates are intended to align with Basel III standards while incorporating Hong Kong-specific regulatory requirements, particularly regarding the treatment of certain capital instruments, provisions, and risk-weighting approaches. The document also includes detailed explanatory notes clarifying the application of each template and its relationship to the underlying regulatory framework.
View the full article:Source
