Our Ref: G10/1/2C

27 September 2001

The Chief Executive
All locally incorporated authorized institutions

Dear Sir/Madam,

Consultation on
Financial Disclosure by Locally Incorporated Authorized Institutions 2001

I am writing to inform you that the HKMA has issued to the two industry Associations today a short paper on Financial Disclosure by Locally Incorporated Authorized Institutions 2001, together with revised versions of the relevant guidelines (in the new Supervisory Policy Manual format - modules FD-1 and FD-2). The proposed changes are mainly to enhance credit risk disclosures, taking into account international best practices and recent papers issued by the Basel Committee. The proposals have already incorporated comments from the Working Party on Financial Disclosure on which a number of authorized institutions were represented.

The consultation paper can also be accessed through the HKMA's public (http://www.info.gov.hk/hkma) and private (http://www.hkfin.net) web-sites. Your institution's comments, if any, on the proposals contained in the consultation paper may be forwarded to the HKMA via your industry Association. Please note that your industry Association has been requested to provide its comments to us by 19 October 2001.

If you have any questions, please feel free to contact Ms Tess Leung at 2878-8279 or Ms Kennis Hui at 2878-8228.

Yours faithfully,

Simon Topping
Executive Director (Banking Policy)