Supervisory Policy Manual LM-1: Regulatory Framework for Supervision of Liquidity Risk

Banking Policy Department Our Ref: B1/15C B1/21C S4/16C 28 August 2020 The Chief Executive All Authorized Institutions Dear Sir / Madam, Supervisory Policy Manual (SPM): LM-1 “Regulatory Framework for Supervision of Liquidity Risk” I am writing to inform you that, following consultation with the two industry Associations, the Monetary Authority issues by notice in the Gazette today a revised version of the SPM module LM-1 “Regulatory Framework for Supervision of Liquidity Risk” (as attached) as a statutory guideline under section 7(3) of the Banking Ordinance. The revised SPM module has incorporated the HKMA’s regulatory requirements consequential to the commencement of the Banking (Liquidity) (Amendment) Rules 2019, and reflected the latest development in the Basel III liquidity standards. On-line access to the SPM module is available under the icon for “Supervisory Policy Manual” on the HKMA’s public (https://www.hkma.gov.hk/eng/) and private (https://www.stet.iclnet.hk) websites. Should you have any questions relating to this SPM module, please contact Eve Law on 2878-1197 or Eric Ng on 2878-8603. Yours faithfully, Daryl Ho Executive Director (Banking Policy) Encl cc: The Chairperson, The Hong Kong Association of Banks The Chairperson, The DTC Association FSTB (Attn: Ms Eureka Cheung)