Regulatory Alerts2019-07-09
Added · Updated
Frequently Asked Questions on Reporting Treatment of IPO-related Transactions in Calculating Capital and Liquidity Ratios
The Hong Kong Monetary Authority permits Authorized Institutions using the foundation internal ratings-based approach to apply advanced maturity treatment for recycled IPO subscription monies in capital ratio calculations. Receiving banks may utilize a look-through approach to determine appropriate outflow rates and available stable funding factors for customer deposits used in IPO subscriptions when calculating liquidity coverage and net stable funding ratios. This flexibility is contingent upon the bank's ability to make reasonable estimations and is explicitly excluded for IPO subscription monies funded by bank loans.
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