Our Ref.:B1/21C
            B1/15C

20 December 2001

The Chief Executive
All Locally Incorporated Authorized Institutions

Dear Sir/Madam,

Supervisory Policy Manual ("SPM")
CA-G-2 "Maintenance of Adequate Capital against Market Risk"

As agreed with the industry, the consultation process for those modules of the SPM that are largely re-castings of existing guidelines will take the form of posting them on the HKMA's private and public web-sites for a specified period for authorized institutions’ comment before they are finalised.

This is to inform you that we have today posted in this way a module "Maintenance of Adequate Capital against Market Risk". This is accessible on the HKMA's private (http://www.hkfin.net) and public (http://www.info.gov.hk/hkma/eng/bank/spma/index.htm) web-sites under the icon of "Supervisory Policy Manual". If you have any comments on the module, I would be grateful if these could be forwarded to the HKMA for the attention of Mr Cho-hoi Hui by 16 January 2002.

Should you have any questions relating to the module, please feel free to contact Mr Cho-hoi Hui on 2878 1485 or send an email to him at Cho-hoi_hui@hkma.gov.hk.

Yours faithfully

Simon Topping
Executive Director (Banking Policy)

c.c.: The Chairman, Hong Kong Association of Banks
       The Chairman, The Deposit-taking Companies Association