On 24 Jan 2025, the HKMA revised SPM Module CA-G-5 'Supervisory Review Process' to align with the Basel III final reform package and incorporate updated climate-related financial risk policy requirements. The revision takes effect immediately for all provisions except climate-related elements, which are deferred to no earlier than 1 January 2026. The changes constitute amendments to existing supervisory guidance, not new regulatory requirements.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Introduction and Purpose of Revision
On 24 Jan 2025, the Hong Kong Monetary Authority (HKMA) issued a revised version of Supervisory Policy Manual (SPM) Module CA-G-5 'Supervisory Review Process' as a statutory guideline under section 7(3) of the Banking Ordinance, following consultation with industry associations. The revision primarily aligns the module with the Basel III final reform package incorporated in the Banking (Capital) (Amendment) Rules 2023, while incorporating updated policy requirements and clarifying existing provisions.
Key Regulatory Changes
The revised module implements changes to existing supervisory requirements to ensure alignment with the Basel III final reform package, including updated capital adequacy and risk management frameworks. Additionally, it integrates new policy expectations regarding climate-related financial risks, though these specific provisions are not immediately effective to allow industry preparation time.
Effective Dates and Implementation
The revised module generally takes effect on its date of issuance (24 Jan 2025), with the exception of provisions referencing climate-related financial risks. These climate-related provisions will be deferred to an effective date no earlier than 1 January 2026, to be announced separately, while all other changes apply immediately upon issuance.
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