Regulatory Alerts2019-03-01
Added · Updated
Revised Return of Capital Adequacy Ratio (Form MA(BS)3) Enclosure 6: Completion Instructions - Part IIIa (Basic Approach)
Authorized institutions incorporated in Hong Kong using the basic approach must complete Form MA(BS)3(IIIa) to report risk-weighted amounts for credit risk, covering on-balance sheet and off-balance sheet exposures in the banking and trading books while excluding specific items like securitization exposures and those subject to capital deduction. The instructions define exposure classifications into eight standard classes, specify risk-weighting percentages for sovereign, public sector entity, bank, and other exposures based on country tiers and maturity, and detail calculation methods for securities financing transactions and failed trades. Reporting entities must adhere to specific definitions for Tier 1 and Tier 2 countries, apply recognized credit risk mitigation techniques, and ensure double counting of exposures is avoided across the reporting form.
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