Regulatory Alerts2024-02-28
Added · Updated
Completion Instructions for Return of Capital Adequacy Ratio (MA(BS)3), Return of Leverage Ratio (MA(BS)27) and Return of Large Exposures (MA(BS)28)
Authorized institutions incorporated in Hong Kong using the standardized credit risk approach must complete Form MA(BS)3(IIIb) to report risk-weighted amounts for credit risk under Part 4 of the Banking (Capital) Rules. The instructions specify that reporting covers on-balance sheet and off-balance sheet exposures in the banking book, default risk exposures in the trading book, and credit exposures to persons holding unsegregated collateral, while excluding specific items such as securitization exposures and exposures to central counterparties. Detailed guidance is provided for exposure classification into thirteen standard classes, definitions of terms like recognized credit risk mitigation, and rules to prevent double counting of exposures. Specific reporting arrangements are mandated for selected exposure classes, including sovereign, bank, corporate, collective investment scheme, and residential mortgage loan exposures, along with instructions on the use of External Credit Assessment Institution ratings.
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