Pillar 3 Disclosure Requirements under the Capital Adequacy Rules - Updated Framework

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Saudi Arabian Monetary Authority (SAMA)
Headquarters

Banking Policy Department
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Greetings,

Subject: Pillar 3 Disclosure Requirements under the Capital Adequacy Rules - Updated Framework

With reference to the Basel Committee on Banking Supervision (BCBS) requirements regarding Pillar 3 disclosure under capital adequacy rules, which the Committee published in January 2015 and SAMA highlighted in its December 2016 disclosures, we inform you of the issuance of Phase Two of the aforementioned disclosure requirements as an update to the previous phase, dated March 2017.

The Phase Two requirements aim to enhance market discipline, and the update contains three core elements as follows:

Element One: Consolidation of all current Pillar 3 disclosure requirements issued by the Committee, covering capital composition, leverage ratio, liquidity ratios, indicators for Global Systemically Important Banks (G-SIBs), capital buffer required to counter cyclical fluctuations, credit prevention, interest rate risk in the banking book, and equities.

Element Two: Provision of a dashboard for key prudential metrics related to banks, providing a broader view of the bank's prudential position, including new disclosure requirements for valuation adjustments with detailed calculation methods.

Element Three: Reflection of updates on ongoing regulatory framework reforms, such as the Total Loss-Absorbing Capacity (TLAC) rules for G-SIBs, and the updated market risk framework published by the Committee in January 2016.

The Committee set the end of 2017 for applying disclosure requirements to existing regulatory frameworks, while disclosure dates for other under-preparation regulatory frameworks have been aligned with the implementation dates of each framework. The Authority requests you to refer to the new release link on the Committee's website (https://www.bis.org/bcbs/publ/d400.htm) and emphasizes full compliance with its contents.

Yours faithfully, ...
Thamer bin Mohammed Al-Issa
General Manager, Banking Supervision Department

Distribution Scope:
Local banks operating in the Kingdom

SAMA, P.O. Box 2992, Riyadh 11179, Postal Address: Headquarters, Telex 404400, Phone 463200, Fax 4672414
Reference No.: 381000088967
Date: 1438/08/22 [Hijri]
Attachments:
Respected Recipient