Hong Kong Regulations

BANKING (CAPITAL) RULES - SECT 53

On-balance sheet exposures and off-balance sheet exposures to be covered

An authorized institution shall, for the purposes of calculating an amount
representing the degree of credit risk to which the institution is exposed
under section 52, take into account and risk-weight—

   (a)  all of the institution's on-balance sheet exposures and off-balance
        sheet exposures booked in its banking book except such exposures—

        (i)    which under sections 48 and 49 are required to be deducted from
               any of the institution's core capital and
               supplementary capital; or

        (ii)   which are subject to the requirements of Part 7;

   (b)  all of the institution's exposures to counterparties under
        credit derivative contracts, OTC derivative transactions, or
        repo-style  transactions, booked in its trading book; and

   (c)  all of the institution's market risk exposures which are exempted from
        section 17 under section 22, except for its total net open position in
        foreign exchange exposures as derived in accordance with section 296.