Hong Kong Regulations

BANKING (CAPITAL) RULES - SECT 20

Authorized institution may apply for approval to use approach used by parent bank to calculate its market risk

(1) An authorized institution may apply to the Monetary Authority for approval
to use the approach used by its parent bank to calculate its market risk.

(2) Subject to subsection (3), the Monetary Authority shall determine an
application under subsection (1) from an authorized institution by—

   (a)  granting approval to the institution to use the approach used by its
        parent bank to calculate its market risk; or

   (b)  refusing to grant the approval.

(3) Without prejudice to the generality of subsection (2)(b), the Monetary
Authority shall refuse to grant approval to an authorized institution to use
the approach used by its parent bank to calculate its market risk unless—

   (a)  the institution demonstrates to the satisfaction of the Monetary
        Authority that use of that approach will not materially prejudice the
        calculation of the institution's regulatory capital for market risk;
        and

   (b)  in the opinion of the Monetary Authority, the parent bank is
        adequately supervised by the relevant banking supervisory authority in
        respect of the calculation of market risk.