Hong Kong Regulations

BANKING (DISCLOSURE) RULES - SECT 3

Application

(1) Parts 2 and 4 apply to an authorized institution incorporated in Hong Kong
except such an institution which is exempted under subsection

(7).

(2) Part 3 applies to an authorized institution incorporated in Hong Kong
except such an institution which is exempted under subsection

(8).

(3) Part 5 applies to an authorized institution—

   (a)  to which Part 4 applies; and

   (b)  which uses the STC approach to calculate its credit risk for—

        (i)    non-securitization exposures; or

        (ii)   non-securitization exposures the subject of an exemption under
               section 12(2)(a) of the Capital Rules.

(4) Part 6 applies to an authorized institution—

   (a)  to which Part 4 applies; and

   (b)  which uses the BSC approach to calculate its credit risk for
        non-securitization exposures.

(5) Part 7 applies to an authorized institution—

   (a)  to which Part 4 applies; and

   (b)  which uses the IRB approach to calculate its credit risk for
        non-securitization exposures.

(6) Part 8 applies to an authorized institution incorporated outside Hong Kong
except such an institution which is exempted under subsection (9).

(7) For the purposes of subsection (1), the Monetary Authority may, by notice
in writing given to an authorized institution incorporated in Hong Kong,
exempt the institution from the application of Parts 2 and 4 if—

   (a)  the institution is a deposit-taking company or restricted licence
        bank; and

   (b)  the institution demonstrates to the satisfaction of the Monetary
        Authority that it meets the following criteria—

        (i)    it has total assets less provisions of less than $1 billion (or
               the equivalent amount in any foreign currency); and

        (ii)   it has total deposits from customers of less than $300 million

(or the equivalent amount in any foreign currency).

(8) For the purposes of subsection (2), the Monetary Authority may, by notice
in writing given to an authorized institution incorporated in Hong Kong,
exempt the institution from the application of Part 3 if—

   (a)  the institution is exempted from the application of Parts 2 and 4
        under subsection (7); or

   (b)  the institution—

        (i)    is not listed on The Stock Exchange of Hong Kong Limited; and

        (ii)   is a wholly owned subsidiary of an authorized institution
               incorporated in Hong Kong.

(9) For the purposes of subsection (6), the Monetary Authority may, by notice
in writing given to an authorized institution incorporated outside Hong Kong,
exempt the institution from the application of Part 8 if the institution
demonstrates to the satisfaction of the Monetary Authority that it meets the
following criteria—

   (a)  its local branches, together with its principal place of business in
        Hong Kong, have in aggregate total assets less provisions of less than
        $10 billion (or the equivalent amount in any foreign currency); and

   (b)  its local branches, together with its principal place of business in
        Hong Kong, have in aggregate total deposits from customers of less
        than $2 billion (or the equivalent amount in any foreign currency).

(10) For the purposes of determining whether or not an authorized institution
meets the criteria referred to in subsection (7)(b) or (9), the Monetary
Authority shall make reference to the relevant average of the relevant figures
over the relevant period of the institution.

(11) Where the Monetary Authority has determined that an authorized
institution is not exempted under subsection (7) because the institution does
not meet the criteria referred to in subsection (7)(b), the institution shall
not subsequently be exempted under subsection (7) unless—

   (a)  the Monetary Authority makes a subsequent determination that the
        institution is exempted under subsection (7); and

   (b)  the institution submits to the Monetary Authority a business plan,
        within a period reasonable in all the circumstances of the case,
        which—

        (i)    demonstrates to the satisfaction of the Monetary Authority
               that, if the plan were implemented by the institution, it would
               be unlikely that the institution would cease to meet the
               criteria referred to in subsection (7)(b) during the period
               referred to in subparagraph (ii); and

        (ii)   covers such an appropriate period in the future that the
               Monetary Authority is satisfied that it would be unlikely that
               the institution would cease to meet the criteria referred to in
               subsection

(7)(b) in the foreseeable future.

(12) Where the Monetary Authority is satisfied that an authorized institution
which is exempted under subsection (7) ceases to fall within the description
of subsection (7)(a) or ceases to meet the criteria referred to in subsection
(7)(b), the Monetary Authority may, by notice in writing given to the
institution, inform the institution that it ceases to be so exempted from the
date specified in the notice.

(13) Where the Monetary Authority is satisfied that an authorized institution
which is exempted under subsection (8) ceases to fall within the description
of subsection (8)(a) or (b), the Monetary Authority may, by notice in writing
given to the institution, inform the institution that it ceases to be so
exempted from the date specified in the notice.

(14) Where the Monetary Authority is satisfied that an authorized institution
which is exempted under subsection (9) ceases to meet the criteria referred to
in that subsection, the Monetary Authority may, by notice in writing given to
the institution, inform the institution that it ceases to be so exempted from
the date specified in the notice.

(15) These Rules do not apply to or in relation to an authorized institution
except on and after the first day of the institution's first financial year
commencing after 31 December 2006.

(16) For the avoidance of doubt, it is hereby declared that subsection (15)
shall not be construed to disapply, in respect of a reporting period of an
authorized institution to which these Rules do not apply pursuant to the
operation of that subsection, any of the provisions of the Ordinance
(including any guidelines made under the Ordinance)—

   (a)  relating to disclosures by an authorized institution; and

   (b)  as in force immediately before the commencement of that subsection.

(17) In this section—

"relevant average" (有關平均數), in relation to the relevant figures for
an authorized institution, means the arithmetic mean of the relevant figures
as at the end of each calendar month for the last relevant period of the
institution;

"relevant figures" (有關數字), in relation to an authorized institution,
means the figures as at the end of each calendar month relating to the
institution's total assets less provisions and total deposits from customers,
as set out in the return relating to assets and liabilities submitted by the
institution to the Monetary Authority for each calendar month pursuant to
section 63 of the Ordinance;

"relevant period" (有關期間), in relation to an authorized institution,
means each period of 12 calendar months ending on and including the fifth
calendar month preceding the close of the institution's financial year.

"relevant average" (有關平均數)

"relevant figures" (有關數字)

"relevant period" (有關期間)