Regulatory Alerts2024-10-24
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Code of Practice: Resolution Planning - LAC Requirements (LAC-1)
The Hong Kong Monetary Authority issued this Code of Practice chapter to provide guidance on the exercise of discretionary powers under the Loss-absorbing Capacity Rules for authorized institutions. It establishes a risk-based framework for resolution planning, setting a HK$150 billion asset threshold for prioritizing strategy development and a HK$300 billion threshold for imposing specific LAC requirements. The document details the operational mechanics of LAC consolidation groups, ratio variations, and mandatory disclosure obligations to ensure orderly financial institution resolution.
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