Regulatory Alerts2021-05-12
Added · Updated
Completion Instructions for MA(BS)3 Part IIIc Revised Banking Returns and Disclosure Templates
Authorized institutions incorporated in Hong Kong using the internal ratings-based approach must complete Form MA(BS)3(IIIc) to report credit exposures subject to this method, including on-balance sheet and off-balance sheet items in the banking book and trading book. The instructions mandate classifying exposures into six IRB classes and twenty-six subclasses, such as specialized lending, SME corporates, sovereigns, banks, retail, equity, and other exposures, while specifying calculation approaches like foundation IRB, advanced IRB, or supervisory slotting criteria. Specific thresholds apply, notably requiring corporate exposures with total annual revenue under HK$500 million to be classified as SME corporates unless substituted by total assets with Monetary Authority consent. The return structure comprises six divisions covering summary risk-weighted amounts, detailed subclass breakdowns, loss given default data, off-balance sheet exposures, derivative default risks, and expected loss versus eligible provisions calculations.
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