On 09 Jun 2025, the HKMA revised the Completion Instructions for Return MA(BS)23, mandating updated liquidity monitoring reporting for authorized institutions. The revision specifies reporting bases, monthly/quarterly frequencies, 'principal amount' valuation standards, and detailed maturity profiling requirements, with Part 5 requiring LCR reporting by significant currencies for category 1 institutions. These changes refine existing reporting protocols to enhance liquidity risk supervision.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Introduction
On 09 Jun 2025, the Hong Kong Monetary Authority (HKMA) issued revised Completion Instructions for Return on Liquidity Monitoring Tools (Form MA(BS)23), updating reporting requirements for authorized institutions to enhance liquidity risk monitoring and supervision.
Reporting Framework and Frequency
The revised form mandates reporting on a Hong Kong office basis for all authorized institutions, with unconsolidated basis for locally incorporated banks subject to Banking (Liquidity) Rules (BLR) rule 10(1)(b) and consolidated basis for those subject to BLR rule 11(1). Reporting frequency requires Parts 1–3 to be submitted monthly within one month after month-end, while Parts 4A/4B/4C and Part 5 (where applicable) must be submitted quarterly within one month after quarter-end. Institutions must maintain systems capable of generating required liquidity data more frequently than regulatory reporting timelines.
Key Reporting Requirements
All assets, liabilities, and cash flows must be reported at 'principal amount' (fair value for marketable assets, book value for others), with foreign currency amounts converted to HKD using closing T/T rates. A currency is deemed 'significant' if liabilities denominated in it exceed 5% of total liabilities. For maturity profiling, contractual terms govern reporting, with embedded options requiring specific assumptions (e.g., customers exercising prepayment options, institutions assuming option non-exercise unless notified). Pledged assets must be reported at contractual maturity dates, excluding those already reported under other items to prevent double-counting.
Part-Specific Instructions
Part 1 requires reporting of top 10 bank/non-bank funding providers and significant funding instruments (e.g., retail deposits, interbank funding, capital instruments) with maturity breakdowns. Part 2 details unencumbered assets eligible for secured borrowing, categorized by collateral acceptability under HKMA facilities, overseas central banks, or wholesale markets. Part 3 covers committed facilities received or granted, requiring identification of connected parties. Part 4 (with Parts 4A/B/C) mandates maturity profiles for on- and off-balance sheet items, with Part 4A/B requiring granular reporting for category 1, 2A, and specified category 2 institutions. Part 5 (for category 1 institutions only) requires Liquidity Coverage Ratio (LCR) components by significant currency, with specific rules for cross-currency cash flow treatment.
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