Regulatory Alerts2025-12-19
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Market Risk Capital Charge
The Hong Kong Monetary Authority issued Supervisory Policy Manual MR-1 to establish minimum standards for Authorized Institutions' market risk capital charges aligned with the Basel Committee's Fundamental Review of the Trading Book. The document mandates the use of the Standardised, Internal Models, or Simplified Standardised approaches for calculating capital requirements while defining strict boundaries between trading and banking books. It also introduces specific regulatory treatments for cryptoasset exposures and structural foreign exchange risk hedging effective from January 2026.
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