Cross-sectoral Co-operation

Many financial institutions operate across different sectors. The Financial Institutions (Resolution) Ordinance (FIRO) establishes a cross-sectoral resolution regime in Hong Kong under which each of the existing sectoral regulators, the Insurance Authority (IA), the Monetary Authority (MA), and the Securities and Futures Commission (SFC), is the resolution authority (RA) for within scope financial institutions (“within scope FIs”) under their respective purviews.

According to the FIRO, the MA is also designated as the lead resolution authority (LRA) of all of the existing cross-sectoral groups (a group of companies that include within scope FIs from more than one sector) in Hong Kong that include banking sector entities.

As the LRA, the MA has the lead responsibility for the resolution planning, and, if needed, resolution execution of the relevant cross-sectoral groups in coordination with the other RAs.  The MA also acts as the primary point of contact for cross-border resolution planning and cooperates with the home and host authorities of the relevant cross-sectoral groups.

The IA, the MA and the SFC entered into a Memorandum of Understanding (Resolution MoU) on 4 December 2023, which establishes a framework to strengthen and support effective cooperation and coordination between the RAs.  The Resolution MoU sets out the respective roles and functions of an LRA and an RA, and establishes channels and arrangements for communication and exchange of information as permitted under the FIRO.