Hong Kong Regulations

BANKING (CAPITAL) RULES - SECT 51

Interpretation of Part 4

In this Part, unless the context otherwise requires—

"attributed risk-weight" (歸屬風險權重), in relation to a person to whom
an authorized institution has an exposure—

   (a)  if—

        (i)    the risk-weight of the exposure is determined in accordance
               with any of sections 55, 56, 57, 58, 59, 60 and 61; and

        (ii)   the person (or, where the person is a public sector entity or
               sovereign foreign public sector entity, the sovereign of the
               jurisdiction in which the person is incorporated) has an
               ECAI issuer rating,
means the risk-weight which would be attributable, in accordance with those
sections, to a senior and unsecured debt obligation of the person based on
that ECAI issuer rating, and on the assumption that no
ECAI issue specific rating has been assigned to any debt obligation of the
person (or, where the person is a public sector entity or sovereign 
foreign public sector entity, the sovereign of the jurisdiction in which the
person is incorporated);

   (b)  if—

        (i)    the risk-weight of the exposure is determined in accordance
               with any of sections 55, 56, 57, 58, 59, 60 and 61; and

        (ii)   the person (or, where the person is a public sector entity or
               sovereign foreign public sector entity, the sovereign of the
               jurisdiction in which the person is incorporated) does not have
               an ECAI issuer rating,
means the risk-weight which would be attributable, in accordance with those
sections, to an exposure to the person as an obligor who has neither an
ECAI issuer rating nor any ECAI issue specific rating assigned to any debt
obligation of the person (or, where the person is a public  sector entity or
sovereign foreign public sector entity, the risk-weight which would be
attributable, in accordance with section 57, to an exposure to the peron on
the assumption that the sovereign of the jurisdiction in which the person is
incorporated does not have an ECAI issuer rating);

   (c)  if the risk-weight of the exposure is determined in accordance with
        section 64, 66 or 67, means the risk-weight which would be
        attributable to the exposure pursuant to those sections;

"cash items" (現金項目), in relation to an authorized institution, means
all or any of the following—

   (a)  legal tender notes or other notes, and coins, representing the lawful
        currency of a country held by the institution;

   (b)  the institution's holdings of certificates of indebtedness issued by
        the Government for the issue of legal tender notes;

   (c)  gold bullion held by the institution, or gold bullion held on an
        allocated basis for the institution by another person, which is backed
        by gold bullion liabilities;

   (d)  gold bullion held on an unallocated basis for the institution by
        another person which is backed by gold bullion liabilities;

   (e)  gold bullion held by the institution, or gold bullion held for the
        institution by another person, which is not backed by gold bullion
        liabilities;

   (f)  cheques, drafts and other items drawn on other banks—

        (i)    which are payable to the account of the institution immediately
               upon presentation; and

        (ii)   which are in the process of collection;

   (g)  unsettled clearing items of the institution which are being processed
        through any interbank clearing system in Hong Kong;

   (h)  receivables from transactions in securities (other than
        repo-style transactions), foreign exchange, and commodities which are
        not yet due for settlement;

   (i)  positive current exposure incurred by the institution under
        transactions in securities (other than repo-style transactions),
        foreign exchange, and commodities—

        (i)    which are entered into on a delivery-versus-payment basis; and

        (ii)   which are outstanding after the settlement date in respect of
               the transaction concerned;

   (j)  the amounts of payment made or the current market value of the thing
        delivered, and the positive current exposure incurred, by the
        institution under transactions in securities (other than repo-style 
        transactions), foreign exchange, and commodities—

        (i)    which are entered into on a non-delivery-versus-payment basis;
               and

        (ii)   which are outstanding up to and including the fourth business 
               day after the settlement date in respect of the transaction
               concerned;

"comprehensive approach" (全面方法), in relation to the use by an
authorized institution of recognized collateral which falls within section 80
to reduce the risk-weighted amount of the institution's exposures, means the
method of using the recognized collateral set out in Division 7;

"corporate" (法團) means—

   (a)  a company; or

   (b)  a partnership or any other unincorporated body, which is neither—

   (c)  a public sector entity, bank or securities firm; nor

   (d)  an obligor to which an authorized institution has a regulatory 
        retail exposure;

"credit equivalent amount" (信貸等值數額), in relation to an off-balance
sheet exposure, means the credit equivalent amount of the exposure calculated
under section 71 or 73, as the case requires;

"credit protection covered portion" (信用保障涵蓋部分), in relation to
an exposure of an authorized institution which is covered by
recognized collateral, a recognized guarantee or a
recognized credit derivative contract, means that portion of the exposure
(which may be all of the exposure) which is covered by the current market
value of the recognized collateral, or the maximum liability of the
credit protection provider to the institution under the recognized guarantee
or recognized credit derivative contract, as the case may be;

"credit protection uncovered portion" (不受信用保障涵蓋部分), in
relation to an exposure of an authorized institution which is covered by
recognized  collateral, a recognized guarantee or a
recognized credit derivative  contract, means that portion of the exposure
which is not covered by the current market value of the recognized collateral,
or the maximum liability of the credit protection provider to the institution
under the recognized guarantee or recognized credit derivative contract, as
the case may be;

"debt securities" (債務證券) means any securities other than shares,
stocks or import or export trade bills;

"exposure" (風險承擔), in relation to an authorized institution, means a
credit exposure (including an asset) of the institution;

"main index" (主要指數) means an index by reference to which
futures contracts or option contracts are traded on a recognized exchange;

"minimum holding period" (最短持有期), in relation to collateral or any
other thing held by an authorized institution, or by another person, for the
institution's benefit (however described), means a period—

   (a)  which is reasonably likely to be required by the institution to
        realize the collateral or thing;

   (b)  which commences on the date of the default by the obligor giving rise
        to the right on the part of the institution to realize the collateral
        or thing; and

   (c)  which ends on the business day (being a day which is not a public
        holiday in any relevant market for the collateral or thing) on which
        the institution would be reasonably likely to be able to realize the
        collateral or thing;

"non-qualifying reference obligation" (不合資格參照義務) means a
reference  obligation which is not a qualifying reference obligation;

"past due exposure" (逾期風險承擔) means an exposure which—

   (a)  is overdue for more than 90 days; or

   (b)  has been rescheduled;

"principal amount" (本金額)—

   (a)  in relation to an on-balance sheet exposure of an authorized
        institution, means the book value (including accrued interest and
        revaluations) of the exposure;

   (b)  in relation to an off-balance sheet exposure of an authorized
        institution, means—

        (i)    subject to subparagraph (ii), in the case of an exposure listed
               in Table 10, the contracted amount of the exposure;

        (ii)   in the case of an exposure listed in Table 10 which is an
               undrawn facility or the undrawn portion of a partially drawn
               facility, the amount of the undrawn commitment;

        (iii)  subject to subparagraph (iv), in the case of an exposure listed
               in Table 11, the notional amount of the exposure;

        (iv)   in the case of an exposure listed in Table 11 where the stated
               notional amount of the exposure is leveraged or enhanced by the
               structure of the exposure, the effective notional amount of the
               exposure taking into account that the stated notional amount is
               so leveraged or enhanced, as the case may be;

"qualifying reference obligation" (合資格參照義務) means a
reference obligation which falls within section 287(4) or is issued by a
sovereign with a credit quality grade of 1, 2 or 3 as determined in accordance
with section  287 ;

"recognized collateral" (認可抵押品) means collateral recognized under
section  77 ;

"recognized credit derivative contract" (認可信用衍生工具合約)
means—

   (a)  a credit derivative contract recognized under section 99(1); or

   (b)  a credit derivative contract which falls within section 99(2) or (3)
        to the extent that it is deemed under that section to be a
        recognized credit derivative contract;

"recognized guarantee" (認可擔保) means a guarantee recognized under
section  98 ;

"regulatory retail exposure" (監管零售風險承擔) means an exposure of
an authorized institution which shall be allocated a risk-weight of 75% under
section 64;

"rescheduled" (重組), in relation to an on-balance sheet exposure of an
authorized institution—

   (a)  subject to paragraph (b), means the original terms of repayment of the
        exposure have been revised because of the inability of the obligor to
        meet the original repayment terms;

   (b)  does not include an exposure, the original terms of repayment of which
        have been revised as referred to in paragraph (a), where the exposure
        has subsequently been serviced by the obligor in accordance with the
        revised repayment terms continuously for—

        (i)    in the case of an exposure with monthly payments (including
               both interest and principal), a period of not less than 6
               months; or

        (ii)   in any other case, a period of not less than 12 months;

"simple approach" (簡易方法), in relation to the use by an authorized
institution of recognized collateral which falls within section 79 to reduce
the risk-weighted amount of the institution's exposures, means the method of
using the recognized collateral set out in Division 6;

"small business" (小型企業), in relation to a
regulatory retail exposure—

   (a)  means—

        (i)    subject to paragraph (b), an unlisted company with an annual
               turnover not exceeding $50 million which, if required to give
               consent under the small business consent provisions, has given
               its consent for the disclosure of its credit data to a
               commercial credit reference agency; or

        (ii)   an unincorporated enterprise with an annual turnover not
               exceeding $50 million which, if required to give consent under
               the small  business consent provisions, has given its consent
               for the disclosure of its credit data to a commercial credit
               reference agency;

   (b)  does not include an unlisted company which belongs to a group 
        of companies with an annual turnover exceeding $50 million;

"small business consent provisions" (小型企業同意條文) means the
provisions of—

   (a)  the Commercial Credit Reference Agency framework set out in the
        Monetary Authority's Supervisory Policy Manual Module 1C – 7
        entitled "The Sharing and Use of Commercial Credit Data through a
        Commercial Credit Reference Agency"; or

   (b)  any guidelines issued by the Monetary Authority, The Hong Kong
        Association of Banks, or The DTC Association, relating to the
        framework referred to in paragraph (a);

"sovereign foreign public sector entity"
(屬官方實體的非本地公營單位)—

   (a)  subject to paragraph (b), means a foreign public sector entity which
        is regarded as a sovereign for the purposes of calculating the
        capital adequacy ratio of a bank by the relevant banking supervisory
        authority of the jurisdiction in which the entity and the bank are
        incorporated;

   (b)  does not include a restricted foreign public sector entity;

"standard supervisory haircut" (標準監管扣減), in relation to the
comprehensive  approach to the treatment of recognized collateral, means a
haircut specified in Schedule 7.

"attributed risk-weight" (歸屬風險權重)

"cash items" (現金項目)

"comprehensive approach" (全面方法)

"corporate" (法團)

"credit equivalent amount" (信貸等值數額)

"credit protection covered portion" (信用保障涵蓋部分)

"credit protection uncovered portion" (不受信用保障涵蓋部分)

"debt securities" (債務證券)

"exposure" (風險承擔)

"main index" (主要指數)

"minimum holding period" (最短持有期)

"non-qualifying reference obligation" (不合資格參照義務)

"past due exposure" (逾期風險承擔)

"principal amount" (本金額)

"qualifying reference obligation" (合資格參照義務)

"recognized collateral" (認可抵押品)

"recognized credit derivative contract" (認可信用衍生工具合約)

"recognized guarantee" (認可擔保)

"regulatory retail exposure" (監管零售風險承擔)

"rescheduled" (重組)

"simple approach" (簡易方法)

"small business" (小型企業)

"small business consent provisions" (小型企業同意條文)

"sovereign foreign public sector entity"
(屬官方實體的非本地公營單位)

"standard supervisory haircut" (標準監管扣減)