Extract
Banking (Capital) Rules - Chapter 155L
PART 1 PRELIMINARY
These Rules shall come into operation on the day appointed for the commencement of section 4 of the Banking (Amendment) Ordinance 2005 (19 of 2005). BANKING (CAPITAL) RULES - SECT 2 Interpretation VerDate:01/01/2007 (1) In these Rules, unless the context otherwise requires— "alternative standardized approach" means the method of calculating an authorized institution's operational risk set out in Division 4 of Part 9; "ASA approach" (ASA ???) means the alternative standardized approach; "asset sale with recourse" , in relation to an authorized institution, means an asset sale transaction where the credit risk of the asset sold remains with the institution because the purchaser of the asset is entitled to sell the asset back to the institution within a specified period, or under specified circumstances, under the terms of the transaction; "back-testing" , in relation to the use of an internal model by an authorized institution, means a process whereby the daily changes in the value of a portfolio of exposures of the institution are compared with the daily VaR generated from the institution's internal model applicable to that portfolio; "bank" means— (a) an authorized institution except an authorized institution the authorization of which is for the time being suspended under section 24 or 25 of the Ordinance; or (b) a bank incorporated outside Hong Kong which is not an authorized institution except such a bank— (i) which, in the opinion of the Monetary Authority, is not adequately supervised by the relevant banking supervisory authority; or (ii) the licence or other authorization of which to carry on banking business is for the time being suspended; "banking book" , in relation to an authorized institution, means all the institution's on-balance sheet exposures and off-balance sheet exposures except such exposures which fall within the definition of "trading book" in this section; "basic approach" means the method of calculating an authorized institution's credit risk for non-securitization exposures set out in Part 5; "basic indicator approach" means the method of calculating an authorized institution's operational risk set out in Division 2 of Part 9; "BIA approach" (BIA ???) means the basic indicator approach; "bond" means an interest-bearing or zero-coupon debt security— (a) which is an acknowledgment of a debt promising payment of a specified sum to the holder of the debt security; and (b) which describes a time to maturity which is, or will become, definite; "BSC approach" (BSC ???) means the basic approach; "business day" , in relation to a country, means any day other than— (a) a public holiday in that country; or (b) a day on which the financial markets are not generally open for business in that country; "calendar quarter" means a period of 3 consecutive calendar months ending on a calendar quarter end date; "calendar quarter end date" means the last day of March, June, September or December; "capital charge" , in relation to an authorized institution, means an amount of regulatory capital which the institution is required to hold for an exposure to a relevant risk which, if multiplied by 12.5, becomes the risk-weighted amount of that exposure for that risk; "CCF" means a credit conversion factor; "clean-up call" has the meaning assigned to it by section 227(1); "collective investment scheme" — (a) subject to paragraph (b), has the meaning assigned to it by Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap 571); (b) does not include a restricted collective investment scheme; "collective provisions" , in relation to the exposures of an authorized institution, means an allowance for impairment loss in respect of a group of exposures considered by the institution as having similar credit risk characteristics which are indicative of the debtors’ ability to pay all amounts due according to the contractual terms of the group of exposures, where the impairment loss has been assessed by the institution on a collective basis in respect of the group of exposures by reference to historical loss experience in respect of exposures with similar credit risk characteristics, relevant observable data reflecting current market conditions and other relevant factors; (L.N. 267 of 2006) "commodity" means any precious metal (other than gold), base metal, non-precious metal, energy, agricultural asset or any other physical product which is traded on an exchange; "commodity-related derivative contract" has the meaning assigned to it by section 281; "comprehensive approach" has the meaning assigned to it by section 51; "confidence interval" means a statistical range with a specified probability that a given parameter lies within the range; "consolidated basis" has the meaning assigned to it by section 4; "consolidation group" has the meaning assigned to it by section 4; "core capital" has the meaning assigned to it by section 35; "counter-guara...See the full content of this document