Regulatory Alerts2024-12-13
Added · Updated
Underwriting of Securities: BELR
This module explains the Monetary Authority’s policy on the underwriting and subunderwriting of securities by locally incorporated Authorized Institutions (AIs) under the Banking (Exposure Limits) Rules (BELR). AIs must establish a Board-approved underwriting policy detailing transaction types, limits, and disposal arrangements, while ensuring aggregate exposures to single counterparties do not exceed 25% of Tier 1 capital. The document notes that the previous exemption for underwriting exposures was repealed by the Banking (Exposure Limits) (Amendment) Rules 2023, requiring AIs to monitor these exposures against statutory limits. AIs are granted a seven-working day exemption period to dispose of acquired securities, with potential extensions of up to three months subject to MA approval in special circumstances.
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