Regulatory Alerts2019-07-05
Added · Updated
Completion Instructions for Return of Capital Adequacy Ratio Annex 1 Sovereign Concentration Risk
Authorized institutions incorporated in Hong Kong must complete Form MA(BS)3(VI) to determine the risk-weighted amount for sovereign concentration risk when calculating capital adequacy ratios. An institution has a concentrated sovereign exposure to a country if its specified sovereign exposure to that country exceeds 100% of its Tier 1 capital, using the previous quarter's reported Tier 1 capital unless a reduction of 10% or more has occurred. The form requires reporting the ISO 3166-1 alpha-2 country code and the calculated risk-weighted amount, which is derived by apportioning exposure amounts into brackets defined in Table 34 of the Banking (Capital) Rules and applying corresponding risk weights.
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