Regulatory Alerts2019-04-24
Added · Updated
HKMA and SFC adopt a coordinated approach to supervise banks and licensed corporations
The Hong Kong Monetary Authority and the Securities and Futures Commission issued this circular following coordinated inspections that revealed complex, opaque financing arrangements by a Mainland-based banking group which concealed significant financial risks. The regulators require banks to ensure credit facilities granted to subsidiaries are assessed on an arm's length basis with prudent post-lending monitoring, while licensed corporations must prudently manage group-wide financial risks to contain contagion. Institutions are urged to urgently review similar financing structures involving subsidiaries or affiliates and take necessary steps to address untoward risks.
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