Basel II – return of capital adequacy ratio (final version)

Our Ref.:

S4/3C
B1/15C

13 March 2007

The Chief Executive
All locally incorporated authorized institutions

Dear Sir/Madam,

Basel II - return of capital adequacy ratio (final version)

Following the passage of the Banking (Capital) Rules in December 2006, we have finalized the new return of capital adequacy ratio (CAR) (MA(BS)3) and its completion instructions. The final version of the return and completion instructions has incorporated some minor clarifications and stylistic changes to bring it in line with the final contents of the Rules.

Starting from the position of end-March 2007, your institution is required to use the final version of the new return as attached for statutory reporting purposes, instead of the draft return we issued on 21 September 2006 which was for parallel reporting use only. The required submission dates for the new return are specified in the completion instructions.

This letter and a full set of the final return and completion instructions can be accessed through the HKMA's public (http://www.info.gov.hk/hkma) and private (http://www.stet.finnet.hk/index.htm) websites. The new templates of the STET system for the submission of returns will be available for downloading at the end of March 2007. Please feel free to direct any questions you may have to your usual supervisory contact (regarding the contents of the new return and completion instructions) and to our STET helpdesk at 2878-1800 (regarding the STET templates).

Yours faithfully,

Simon Topping
Executive Director (Banking Policy)

Encl.

c.c.

The Chairman, The Hong Kong Association of Banks
The Chairman, The DTC Association
FSTB (Attn: Mr Clement Chan)