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The Banking (Amendment) Ordinance 2012 (the Amendment Ordinance) was published in the Gazette today (March 9).
The Amendment Ordinance seeks to put in place a legal framework for the implementation in Hong Kong of the banking regulatory reform package released in December 2010 by the Basel Committee on Banking Supervision (the Basel Committee), commonly known as Basel III.
Specifically, the Amendment Ordinance empowers the Monetary Authority to make rules to prescribe the capital, liquidity and disclosure requirements applicable to authorised institutions. The rules will be developed by the Monetary Authority in consultation with the banking industry, and will be subsidiary legislation subject to negative vetting by the Legislative Council.
The Amendment Ordinance also seeks to:
(a) enable the Monetary Authority to issue, or approve, codes of practice for the purpose of providing guidance to authorised institutions in respect of the rules; and
(b) enlarge the review remit of the present Capital Adequacy Review Tribunal (CART) to also cover matters related to liquidity and disclosure for Basel III implementation, and rename CART as the Banking Review Tribunal.
The provisions of the Amendment Ordinance will be brought into operation in phases. Our plan is to follow the Basel Committee's transitional timeline for the introduction of Basel III. Accordingly, the provisions in the Amendment Ordinance enabling the first phase of the Basel Committee's implementation process will be brought into effect on January 1, 2013. They cover principally minimum capital adequacy requirements and corresponding disclosure requirements. The provisions relating to liquidity requirements will come into operation at a later date.
A spokesman for the Financial Services and the Treasury Bureau said, "The implementation of Basel III, which enhances the capital and liquidity frameworks for authorised institutions in Hong Kong, will strengthen the resilience and competitiveness of the local banking system."
A spokesman for the Hong Kong Monetary Authority said, "It is important that Hong Kong, being a major international financial centre and a member of the Basel Committee, implements Basel III in a timely fashion. The implementation of Basel III will keep Hong Kong in line with the latest international regulatory standards."
The Hong Kong Monetary Authority will continue to work closely with the banking industry in the Basel III implementation process and in developing the required rules.
Ends/Friday, March 9, 2012
Issued at HKT 11:15
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