Regulatory Alerts2021-05-12
Added · Updated
Completion Instructions for Return of Capital Adequacy Ratio Part VI Sovereign Concentration Risk
Authorized institutions incorporated in Hong Kong must complete Form MA(BS)3(VI) to determine their risk-weighted amount for sovereign concentration risk when calculating capital adequacy ratios. An institution has concentrated sovereign exposure to a country if its specified sovereign exposure to that country exceeds 100% of its Tier 1 capital. The instructions define specified sovereign entities, outline the calculation methodology using risk-weights from Table 34, and provide illustrative examples for handling direct, indirect, and repo-style exposures.
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