The Banking (Capital) (Amendment) Rules 2020 (BCAR Rules) were gazetted today (24 April 2020), bringing Hong Kong in line with the latest international standards on banking regulation issued by the Basel Committee on Banking Supervision.
The BCAR Rules seek to introduce:
- a new method for calculating the exposure amount of counterparty credit risk arising from derivatives contracts; and
- revisions to the capital treatment of default fund contributions and exposures in respect of access to central clearing services through multiple layers of intermediaries.
The BCAR Rules will come into operation on 30 June 2021.
A copy of the BCAR Rules can be found here.