Hong Kong Regulations

BANKING (CAPITAL) RULES - SECT 13

Revocation of exemption under section 12

(1) Where—

   (a)  an authorized institution uses the STC approach or BSC approach to
        calculate its credit risk for certain non-securitization exposures to
        which an exemption under section 12(2)(a) relates; and

   (b)  the Monetary Authority is satisfied that, if the institution were to
        make a fresh application under section 12(1) for an exemption in
        respect of those non-securitization exposures, the exemption would be
        refused by virtue of section 12(2) or (4), the Monetary Authority may
        take one or more of the measures set out in subsection (2).

(2) The measures referred to in subsection (1) are that—

   (a)  if the fresh application referred to in subsection (1)(b) would be
        refused by virtue of section 12(2), the Monetary Authority may, by
        notice in writing given to the institution, require the institution
        to—

        (i)    submit to the Monetary Authority a plan, within such period

(being a period which is reasonable in all the circumstances of the case) as
specified in the notice, which satisfies the Monetary Authority that, if it
were implemented by the institution, the institution would be able to use the
IRB approach to calculate its credit risk for those
non-securitization exposures within a period which is reasonable in all the
circumstances of the case; and

        (ii)   implement the plan;

   (b)  if the fresh application referred to in subsection (1)(b) would be
        refused by virtue of section 12(4), the Monetary Authority may, by
        notice in writing given to the institution, require the institution
        to—

        (i)    submit to the Monetary Authority a plan, within such period

(being a period which is reasonable in all the circumstances of the case) as
specified in the notice, which satisfies the Monetary Authority that, if it
were implemented by the institution within a period which is reasonable in all
the circumstances of the case, the fresh application would then not be
refused; and

        (ii)   implement the plan; and

   (c)  the Monetary Authority may, by notice in writing given to the
        institution, revoke the exemption on such date, or the occurrence of
        such event, as specified in the notice.

(3) An authorized institution shall comply with the requirements of a notice
given to it under subsection (2)(a) or (b).

(4) For the avoidance of doubt, it is hereby declared that an authorized
institution's compliance with a requirement referred to in subsection (2)(a)
or (b) does not prejudice the generality of the Monetary Authority's power
under subsection (2)(c).