Hong Kong Regulations

BANKING (DISCLOSURE) RULES - SECT 56

General qualitative disclosures

(1) Subject to subsection (2), an authorized institution shall disclose a
description of the main types of risk which arise from its business.

(2) Without prejudice to the generality of subsection (1), an authorized
institution shall ensure that the description it discloses pursuant to that
subsection—

   (a)  includes its credit, market, operational, liquidity, interest rate and
        foreign exchange risks (referred to in this subsection as

"principal risks");

   (b)  covers the policies, procedures and controls it uses for identifying,
        measuring, monitoring and controlling the principal risks and for
        managing the capital required to support its exposures to the
        principal risks; and

   (c)  includes a description of—

        (i)    the titles or positions of the members of the board of
               directors or the senior management who— (L.N. 268 of 2006)
               (A) oversee risk management; (B) set the strategy and policy
               for each type of principal risk; and (C) set the means for
               ensuring that the strategy and policy referred to in
               sub-subparagraph (B) is implemented;

        (ii)   the methods it uses to identify and measure the various types
               of principal risk;

        (iii)  the particulars relating to the approval of transactions

(including the delegation of credit authority) and the approval process for
new products and activities;

        (iv)   the methods it uses to monitor and control the principal risks;

        (v)    the use of limits for controlling the principal risks;

        (vi)   the particulars of operational controls; and

        (vii)  the role of internal audit.