Regulatory Alerts2022-07-11
Added · Updated
Revised Return of Capital Adequacy Ratio (Form MA(BS)3) Annex - MA(BS)3 (Part II)
The document provides illustrative examples and regulatory treatment guidelines for calculating minority interests, deductions from capital bases, and the treatment of expected loss provisions under HKFRS 9. It details the methodology for recognizing minority interests in CET1, Additional Tier 1, and Tier 2 capital based on third-party ownership percentages and surplus capital. It also specifies deduction rules for insignificant and significant LAC investments, applying 10% and 5% concessionary thresholds to CET1, AT1, and T2 capital. Furthermore, it outlines the phase-out schedule for non-complying capital instruments, requiring a 10% annual reduction in recognition from 2013 to 2022.
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