Commencement of Basel III final reform package

55th Floor, Two International Finance Centre, 香 港 中 環 金 融 街 8 號 國 際 金 融 中 心 2 期 55 樓 8 Finance Street, Central, Hong Kong 網 址：www.hkma.gov.hk Website: www.hkma.gov.hk Banking Policy Department Our Ref: B1/15C, B9/75C 15 November 2024 The Chief Executive All Authorized Institutions Dear Sir/Madam, Commencement of Basel III final reform package Further to our letter of 10 October 2024, I am writing to inform you that the 28-day period for the negative vetting of the Banking (Capital) (Amendment) Rules 2023 (Commencement) Notice 2024 (“Commencement Notice”) by the Legislative Council has expired without extension. As a result, Parts 3 and 5 of the Banking (Capital) (Amendment) Rules 2023 (“BCAR”) 1 , excluding certain transitional sections specified in the Commencement Notice, will come into operation on 1 January 2025. 2 Yours faithfully, Martin Sprenger Acting Executive Director (Banking Policy) cc: The Chairperson, The Hong Kong Association of Banks The Chairperson, The DTC Association FSTB (Attn: Mr Justin To) 1 Part 3 of the BCAR provides for amendments in relation to credit risk, the output floor, operational risk and sovereign concentration risk. Part 5 of the BCAR deals with amendments in relation to market risk and credit valuation adjustment (“CVA”) risk. 2 Consequential amendments to the Banking (Disclosure) Rules, the Banking (Liquidity) Rules and the Banking (Exposure Limits) Rules relating to the Basel III final reform package will simultaneously come into operation on 1 January 2025.