Operational resilience, which has risen to increased prominence over recent years, has been brought into even sharper focus following the outbreak of COVID-19. Our risk consulting team is carrying out a survey to explore how financial institutions are managing their crisis response planning and preparedness in the event of severe operational disruption, particularly leading up … Continue Reading
Following the recent publication of a white paper setting out the Hong Kong Monetary Authority’s (HKMA) initial thoughts on supervisory expectations for the management of climate risks (to read our blog post on this, please click here), the HKMA has issued a circular to provide greater detail on the relevant practices adopted by major banks … Continue Reading
The Hong Kong Monetary Authority (the HKMA) has published a white paper outlining its initial views on the supervisory expectations for authorized institutions (AIs) in addressing climate-related issues. The development of the supervisory expectations forms part of the work envisaged under phase 2 of the three-phased approach introduced by the HKMA in May 2019, which … Continue Reading
The Hong Kong Monetary Authority (HKMA) has issued, by notice in the Gazette, revised versions of the Supervisory Policy Manual (SPM) modules CA-G-1 and RE-1 as statutory guidelines under section 7(3) of the Banking Ordinance.[1] CA-G-1 “Overview of Capital Adequacy Regime for Locally Incorporated Authorized Institutions” The changes incorporated in the revised SPM module CA-G-1 … Continue Reading
Further to the introduction of the Phase 2 temporary facilitative measures (TFMs) on 27 March 2020, the Insurance Authority (IA) has released a circular announcing that Phase 2 of the TFMs will be extended by three months in view of the COVID-19 pandemic. The Phase 2 TFMs (amongst other things) permit insurers and intermediaries to … Continue Reading
We have updated our popular client briefing note ‘Doing business in the EU’ covering the temporary transitional relief measures EU27 Member States are implementing, if any, for the period after the transition period should the UK/EU not enter into a free trade agreement. For a copy of the updated briefing note please contact Simon Lovegrove.… Continue Reading
The Securities and Futures Commission (SFC) has published its consultation conclusions on the proposed refinements to the scope of regulated activities and competence requirements relating to the over-the-counter (OTC) derivatives licensing regime (the Consultation Conclusions) contained in its consultation paper dated 20 December 2017 (the Consultation Paper), following feedback from industry associations, market participants, professional … Continue Reading
The Hong Kong Monetary Authority (HKMA) has published a circular setting out key observations and good practices relating to anti-money laundering (AML) and counter-financing of terrorism (CFT) control measures applicable to remote customer on-boarding initiatives. The feedback is based on recent thematic reviews, engagement with authorized institutions (AIs) and technology firms in the Fintech Supervisory … Continue Reading
Following the deferral of the implementation of Basel III announced by the Group of Central Bank Governors and Heads of Supervision on 27 March 2020, the Basel Committee on Banking Supervision (BCBS) issued additional guidance[1] to alleviate the impact of COVID-19 on the global banking system on 3 April 2020. In light of this, the … Continue Reading
In recognition of the impact of COVID-19 on the insurance industry and taking into account a request made by the Hong Kong Federation of Insurers, the Insurance Authority (IA) has issued a circular, announcing that it will modify the approach for bringing certain guidelines into effect. In relation to the following guidelines (which took effect … Continue Reading
In May 2019, the Hong Kong Monetary Authority (HKMA) introduced a three-phased approach to support the development of green and sustainable banking in Hong Kong. The HKMA has now released the common assessment framework under Phase 1, following feedback received from the banking industry. The common assessment framework will be used to assess the “greenness” … Continue Reading
Earlier this month, a joint statement was issued in relation to the establishment of the Green and Sustainable Finance Cross-Agency Steering Group (the Steering Group). This follows a number of recent announcements aimed at supporting the development of sustainable finance in Hong Kong and highlights that tackling climate change remains a top priority for the … Continue Reading
The Securities and Futures Commission (SFC) has announced that the introduction of the initial margin (IM) requirements for non-centrally cleared OTC derivative transactions, initially scheduled to be phased-in from 1 September 2020, will be deferred by one year. To read our previous blog post on the SFC’s consultation conclusions on margin requirements for non-centrally cleared … Continue Reading
The Securities and Futures Commission (the SFC) has issued a circular to provide guidance to licensed corporations (LCs) on managing cybersecurity risks associated with remote working arrangements. The circular sets out some examples of controls and procedures that LCs can implement to protect their internal networks and data under remote working arrangements. The SFC expects … Continue Reading
Amid concerns about extreme market conditions caused by volatility in the crude oil futures markets, the Securities and Futures Commission (SFC) has issued a circular directed at management companies of SFC-authorized exchange traded funds (ETFs) and intermediaries, reminding them of their regulatory obligations, particularly in relation to activities involving futures-based ETFs. A separate circular directed … Continue Reading
The Securities and Futures Commission (SFC) has published a circular directed at commodity futures brokers (brokers) requiring them to take precautionary measures to manage the risks of trading crude oil futures contracts amid unprecedented volatility seen in the crude oil futures markets. The SFC has cautioned brokers not to open new positions for clients who … Continue Reading
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 … Continue Reading
The Hong Kong Monetary Authority (HKMA) has launched a temporary liquidity facility under which US$10 billion will be made available (the Facility) to assist licensed banks with US dollar liquidity. The Facility will comprise of funds obtained through the US Federal Reserve’s FIMA Repo Facility (see our previous blog post here). US dollar liquidity will … Continue Reading
The Securities and Futures Commission (SFC) has issued a circular reminding management companies and market makers[1] of SFC-authorized exchange traded funds[2] (ETFs) of their regulatory obligations. The SFC has expressed concerns that management companies and market makers of ETFs may not be sufficiently prepared to respond to operational disruptions caused by COVID-19, following an incident … Continue Reading
In an increasingly complex and fast-paced regulatory environment, financial services firms must remain responsive to a wide range of evolving areas, whilst ensuring compliance with new laws and regulation. To help our clients stay up to date on regulatory change as it happens, we have created a new financial services regulation hub on the NRF … Continue Reading
The bills amending the Insurance Ordinance (Cap.41) (the IO) which are expected to help Hong Kong grow its insurance sector have now been published in the Gazette. The bills – namely, the Insurance (Amendment) Bill 2020 (the First Bill) and the Insurance (Amendment) (No.2) Bill 2020 (the Second Bill), seek to (i) introduce a new … Continue Reading
Following earlier announcements, the Hong Kong Monetary Authority (HKMA) has issued a circular confirming that, with immediate effect, the regulatory reserve[1] requirement for locally incorporated authorized institutions (AIs) will be reduced by 50%. The reserves released by this move will provide AIs with additional lending capacity to support customers impacted by COVID-19. Reserves released should … Continue Reading
The Hong Kong Monetary Authority (HKMA) has published guidance to assist authorized institutions (AIs) and stored value facility (SVF) licensees with their anti-money laundering (AML) and counter-terrorist financing (CTF) risk management practices during the COVID-19 pandemic. The HKMA has reiterated in the circulars that it does not expect a “zero failure” outcome from AIs and … Continue Reading
Due to the current COVID-19 pandemic and ensuing disruption to the securities industry, the Securities and Futures Commission (SFC) has announced, in its recent circular, that it will extend various upcoming regulatory compliance deadlines by a period of six months. In the same circular, the SFC has also reminded intermediaries of the alternative order recording … Continue Reading
