Recommendations on Interim Financial Disclosure by Authorized Institutions Incorporated in Hong Kong

Our Ref.: G10/1/2C

13 June 2001

The Chief Executive
All locally incorporated authorized institutions

Dear Sir/Madam,

Recommendations on Interim Financial Disclosure
by Authorized Institutions Incorporated in Hong Kong

The HKMA issued in May a consultation paper on "Recommendations on Interim Financial Disclosure by Authorized Institutions Incorporated in Hong Kong - 2001". Having consulted the two industry Associations, the Working Party on Financial Disclosure and the Joint Technical Working Group on Financial Disclosure, the HKMA has now finalized the Package and this is attached to this letter.

The amendments update the Package in line with updates made in December 2000 to Financial Disclosure by Locally Incorporated Authorized Institutions and Disclosure Guidelines for Overseas Incorporated Authorized Institutions. The amendments are summarized below:

(a) Institutions should disclose the breakdown of the gross amount of advances to customers by countries or geographical areas that are considered to be significant to the institution according to the location of the counterparties. Transfer of risk should be taken into account for the analysis (Item (iv) of Part III);

(b) Institutions should disclose foreign currency exposures arising from trading, non-trading and structural positions (Item (v) of Part III);

(c) The terminology of "non-performing loans" and the reconciliation between overdue loans, rescheduled loans and non-performing loans are incorporated (Item (ii) and (vi) of Part III).

The relevant institutions should adopt the recommendations in the Package in respect of their Interim Financial Information Disclosure Statements for financial periods ending on or after 30 June 2001.

The Package can also be accessed through the HKMA's private website for authorized institutions (http://www.hkfin.net). If you have any questions, please feel free to contact Mr. Kim Chong at 2878 1848 or Ms. Tess Leung at 2878 8279.

Yours faithfully,

(Simon Topping)
Executive Director (Banking Policy)

Encl

1. Recommendations on Interim Financial Disclosure by Authorized Institutions Incorporated in Hong Kong (English version) (Word File, 57KB)
2. Appendix A - Implementation of the Recommendations by Authorized Institutions Incorporated in Hong Kong (English version) (Word File, 29KB)
3. Recommendations on Interim Financial Disclosure by Authorized Institutions Incorporated in Hong Kong and Appendix A - Implementation of the Recommendations by Authorized Institutions Incorporated in Hong Kong (Chinese version) (PDF File, 459KB)

c.c.

Chairman, HKAB
Chairman, DTC Association
Hong Kong Exchanges and Clearing Ltd (Attn: Ms. Estella Ng)
Securities and Futures Commission (Attn: Mr. Charles Grieve)
President, Hong Kong Society of Accountants
Auditors of Authorized Institutions
Secretary for Financial Services (Attn: Mr. Edward Mak)