Regulatory Alerts2016-10-18
Added · Updated
TLAC Holdings Standard
The Hong Kong Monetary Authority issued this letter to implement the Basel Committee on Banking Supervision's new standard regarding the regulatory capital treatment of banks' holdings of Total Loss-Absorbing Capacity instruments. The revised rules require deducting such holdings from Tier 2 capital, establish specific exemption thresholds for insignificant investments, and mandate that Common Equity Tier 1 capital used for TLAC requirements cannot simultaneously meet regulatory capital buffers. These changes are scheduled to take effect on 1 January 2019, aligning with the Financial Stability Board's minimum TLAC requirements for global systemically important banks.
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