Code of Practice Chapter LFIR-1 Resolution Planning - Liquidity and Funding in Resolution

Resolution Office 處 置機制 辦 公 室 Our Ref: B9/213/1C B9/213/6C 22 July 2022 The Chief Executive All Authorized Institutions Dear Sir / Madam, Code of Practice Chapter LFIR-1 “Resolution Planning - Liquidity and Funding in Resolution” issued under the Financial Institutions (Resolution) Ordinance (Cap. 628) (“FIRO”) I am writing to inform you that, following consultation with the industry, the Monetary Authority (“MA”) is issuing today LFIR-1 “Resolution Planning – Liquidity and Funding in Resolution”, a new chapter of the code of practice pursuant to section 196 of the FIRO. The chapter sets out the MA’s expectations as to the capabilities and arrangements that an authorized institution (“AI”) should have in place, in business as usual, in order to address the potential impediment to orderly resolution that would arise if an AI were unable to assess its liquidity and funding needs and access funding in resolution. Comments received during the industry consultation have been addressed as appropriate. Separately, the MA is issuing an updated version1 of chapter RA-1 “Operational Independence of the Monetary Authority as Resolution Authority” to reflect certain changes in the reporting lines within the Resolution Office of the HKMA since its establishment. The Resolution Office remains operationally independent and continues to report directly to the MA as a resolution authority under the FIRO. On-line access to the two chapters is available under the “Code of Practice” icon on the HKMA’s public website (https://www.hkma.gov.hk/eng/) and the Supervisory Communication Website (https://www.stet.iclnet.hk). 1 Sections 1.3.1 and 1.3.2 have been updated.

2 Should you have any questions, please contact Mr Edmond Lam (echlam@hkma.gov.hk) of the Resolution Office. Yours faithfully, Elizabeth Coupe Head (Resolution Office) Encl cc: The Chairperson, The Hong Kong Association of Banks The Chairperson, The DTC Association FSTB (Attn: Ms Almaz Leung)