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62.4756

Liquidity

The liquidity requirements applicable to authorized institutions are provided mainly in the Banking (Liquidity) Rules (BLR) issued by the Monetary Authority under section 97H(1) of the Banking Ordinance. Under the BLR, authorized institutions designated by the Monetary Authority as “category 1 institutions” are required to comply with the requirements relating to the Liquidity Coverage Ratio (LCR). The grounds for designation of category 1 institutions are set out in Schedule 1 to the BLR. Usually these institutions are either having significant international exposures or being significant to the general stability of the local banking sector having regard to their size or complexity of business operations. Other authorized institutions are categorically regarded as “category 2 institutions”, which must comply with the requirements relating to the local Liquidity Maintenance Ratio (LMR).

The Monetary Authority has issued a code of practice to facilitate the implementation of the LCR. The Supervisory Policy Manual (SPM) also contains module LM-1 “Regulatory Framework for Supervisory of Liquidity Risk” to provide, among other things, elaborations on the statutory liquidity requirements. In addition to the two quantitative liquidity requirements, authorized institutions are also required to manage liquidity risk according to the guidelines provided in the SPM module LM-2 “Sound Systems and Controls for Liquidity Risk Management”.

Liquidity Rules

Banking (Liquidity) Rules (Cap. 155Q)

Code of Practice

Banking (Liquidity Coverage Ratio - Calculation of Total Net Cash Outflows) Code

Guidance

Notes for Reference of Document set out in the tables below:
XX-X-N = SPM Module Code, CIR = Circulars, N.N.N = Guideline No, FAQ = Frequently Asked Questions, QB = Quarterly Bulletin

Reference

Document

Issued

LM-2

Supervisory Policy Manual (SPM): LM-2 “Sound Systems and Controls for Liquidity Risk Management”

25/11/2016

CIR

Returns MA(BS)1E, MA(BS)18 and MA(BS)23

08/11/2016

LM-1

Supervisory Policy Manual (SPM): LM-1 “Regulatory Framework for Supervision of Liquidity Risk”

29/07/2016

CIR

Return on Liquidity Monitoring Tools (Form MA(BS)23)

07/07/2016

CIR

Return on Liquidity Monitoring Tools (Form MA(BS)23)

06/01/2016

CIR

Return on Liquidity Monitoring Tools (Form MA(BS)23)

25/09/2015

CIR

Return on Large Exposures (Form MA(BS)1D) and Return on Intraday Liquidity Position of an Authorized Institution (Form MA(BS)22)

24/06/2015

CIR

Return on Intraday Liquidity Position of an Authorized Institution

16/06/2015

CIR

Implementation of Basel III

06/02/2015

CIR

Return of Liquidity Position of an Authorized Institution (Form MA(BS)1E)

04/02/2015

CIR

Return of Liquidity Position of an Authorized Institution (Form MA(BS)1E) and Certificate of Compliance with the Banking Ordinance (Forms M(BS)1F(a) and M(BS)1F(b))

24/12/2014

CIR

Implementation of Basel III

24/12/2014

CIR

Stable Funding Requirement
Annex 1: Comparision between the existing and refined SFR
Annex 2: Illustrations of SFR calculation based on the refined regime
Annex 3: SFR quarterly reporting template
Reference Note 1
Reference Note 2

28/11/2014

CIR

Implementation of Basel III

27/11/2014

CIR

Implementation of Basel III

24/10/2014

CIR

Supervisory Policy Manual (“SPM”) LM-2 “Sound Systems and Controls for Liquidity Risk Management” – Section 8 – Maintenance of Liquidity Cushion

25/09/2013

CIR

BCBS Guidance on Monitoring Tools for Intraday Liquidity Management

08/05/2013

CIR

Renminbi (RMB) Net Open Position (NOP) and liquidity ratio

25/04/2013

CIR

Basel III: Revisions to Liquidity Coverage Ratio (LCR)

17/01/2013

CIR

Banking (Admendment) Ordinance 2012

09/03/2012

CIR

Liquidity Ratio - Renminbi (“RMB”) transactions

09/02/2012

CIR

Banking (Amendment) Bill 2011

08/12/2011

CIR

Benchmarking: Stress-testing Practices and Liquidity Risk Management
Annex 1: Sound Practices for Stress-testing
Annex 2: Sound Practices for Liquidity Risk Management

04/08/2011

CIR

Supervisory Policy Manual (SPM) – LM-1 “Liquidity Risk Management” (Revised) and LM-2 “Sound Systems and Controls for Liquidity Risk Management”

01/04/2011

CIR

Implementation of Basel III in Hong Kong

26/01/2011

Returns

MA(BS)1E - Liquidity Position of an Authorized Institution

MA(BS)18 - Return on Selected Data for Liquidity Stress-testing

MA(BS)22 - Return on Intraday Liquidity Position of an Authorized Institution

MA(BS)23 - Return on Liquidity Monitoring Tools

Last revision date: 26 September 2017
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