Hong Kong Regulations

BANKING (DISCLOSURE) RULES - SECT 46

General disclosures

(1) Subject to subsection (2), an authorized institution shall—

   (a)  disclose a description of each of its major business activities which
        is consistent with its internal management classifications;

   (b)  subject to paragraph (c), disclose a breakdown of its major business
        activities expressed in absolute terms or in the case of each activity
        as a percentage of its total business activities; and

   (c)  if the breakdown referred to in paragraph (b) is expressed in absolute
        terms, ensure that the breakdown is consistent with the figures
        disclosed in the institution's audited financial statements.

(2) An authorized institution shall, for each major business  activity—

   (a)  subject to subsection (3), disclose the amount of operating assets of
        the major business activity; and

   (b)  disclose particulars of the major business activity in relation to—

        (i)    total operating income (net of interest expense);

        (ii)   profit or loss before impairment losses and specific provisions
               and collective provisions for impaired assets;

        (iii)  profit or loss after impairment losses and specific provisions
               and collective provisions for impaired assets;

        (iv)   profit or loss before taxation; or

        (v)    any combination of any of the matters referred to in
               subparagraphs (i), (ii), (iii) and (iv).

(3) For the purposes of subsection (2)(a), the operating assets of a
major business activity of an authorized institution are those assets—

   (a)  which are employed in the course of the operating activities of the
        major business activity; and

   (b)  which are directly attributable to the major business activity or
        which can be reasonably allocated to that activity.

(4) Where not less than 10% of an authorized institution's—

   (a)  total operating income (net of interest expense);

   (b)  profit or loss before taxation;

   (c)  total assets;

   (d)  total liabilities; or

   (e)  contingent liabilities and commitments, is booked in a single country
        or geographical segment, the institution shall disclose, for the item
        specified in each of paragraphs (a), (b),

   (c)  , (d) and (e), the absolute amount in respect of the country or
        geographical segment, as the case requires.

(5) For the purposes of subsections (1), (2), (3) and (4), an authorized
institution shall ensure that the figures used in determining the breakdown
and disclosure of the major business activities referred to in those
subsections (including the item specified in each of paragraphs

   (a)  , (b), (c), (d) and (e) of subsection (4)) are consistent with the
        figures disclosed in the institution's audited financial statements.

(6) Where the fees and commission income from a product line of an authorized
institution constitutes not less than 10% of the total amount of fees and
commission income of the institution, the institution shall separately
disclose the fees and commission income attributable to that product line.

(7) An authorized institution shall disclose a breakdown of its
cross-border claims by major countries or geographical segments in accordance
with—

   (a)  the location of the counterparties; and

   (b)  the types of counterparties, broken down into banks, public sector
        entities and others.

(8) An authorized institution shall disclose the gross amount of loans and
advances to customers by major countries or geographical  segments in
accordance with the location of the counterparties.

(9) An authorized institution shall disclose the basis of the country or
geographical segment classification used for the purposes of subsections (7)
and (8).

(10) An authorized institution shall disclose—

   (a)  the amount of impaired loans and advances to customers which are
        individually determined to be impaired and, if available, overdue
        loans and advances to customers, disclosed separately broken down by
        major countries or geographical segments;

   (b)  the amounts of specific provisions allocated in respect of the loans
        and advances referred to in paragraph (a); and

   (c)  that portion of its collective provisions which is allocated to any
        country or geographical segment.

(11) In this section—

"cross-border claim" (跨域債權), in relation to an authorized
institution—

   (a)  subject to paragraph (b), includes—

        (i)    receivables and loans and advances;

        (ii)   cash and balances and placements with banks (including loans 
               and advances to banks);

        (iii)  holdings of certificates of deposit, bills, promissory notes,
               commercial paper, other debt instruments and investments; and

        (iv)   accrued interest and overdue interest on the assets referred to
               in subparagraphs (i), (ii) and (iii);

   (b)  does not include—

        (i)    claims arising between the institution and its branches or
               subsidiaries;

        (ii)   claims on a counterparty in Hong Kong, except to the extent
               that such claims are guaranteed by a person outside Hong Kong;

        (iii)  claims on a counterparty outside Hong Kong, to the extent that
               such claims are guaranteed by a person in Hong Kong;

        (iv)   claims on a branch of a bank located in Hong Kong, except where
               the head office of the bank is located outside Hong Kong; or

        (v)    claims on a branch of a bank located outside Hong Kong, where
               the head office of the bank is located in Hong Kong;

"major business activity" (主要業務活動), in relation to an authorized
institution, means the business activity constitutes not less than 10% of the
total amount of the institution's—

   (a)  total operating income (net of interest expense);

   (b)  profit or loss before impairment losses and specific provisions and
        collective provisions for impaired assets;

   (c)  profit or loss after impairment losses and specific provisions and
        collective provisions for impaired assets; or

   (d)  profit or loss before taxation;

"major country or geographical segment" (主要國家或地域分部)—

   (a)  in relation to an authorized institution's cross-border claims, means
        a country or geographical segment, as the case may be, to which not
        less than 10% of the institution's total cross-border claims are
        attributable after taking into account any recognized risk transfer;
        or

   (b)  in relation to loans and advances to customers, means a country or
        geographical segment, as the case may be, to which not less than 10%
        of the institution's total amount of loans and advances to customers
        are attributable after taking into account any
        recognized risk transfer;

"recognized risk transfer" (認可風險轉移)—

   (a)  in relation to a cross-border claim of an authorized institution,
        means that—

        (i)    the claim is guaranteed by a person in a country which is
               different from that of the counterparty; or

        (ii)   the claim is on an overseas branch of a bank and the head
               office of the bank is located in a country which is different
               from that of the overseas branch; or

   (b)  in relation to loans and advances of a customer of an authorized
        institution, means that the loans and advances are guaranteed by a
        person in a country which is different from that of the customer.

"cross-border claim" (跨域債權)

"major business activity" (主要業務活動)

"major country or geographical segment" (主要國家或地域分部)

"recognized risk transfer" (認可風險轉移)