Cap. 628B 《金融機構(處置機制)(吸收虧損能力規定——銀行界)規則》Financial Institutions (Resolution) (Loss-absorbing Capacity Requirements—Banking Sector) Rules

determine the denominator of its capital adequacy ratio as calculated under the Capital Rules on a solo or solo-consolidated basis;

determine its risk-weighted amount on a solo or solo-consolidated basis;

determine its external or internal loss-absorbing capacity on a solo or solo-consolidated basis; and

determine its external or internal LAC risk-weighted ratio in accordance with these Rules on a solo or solo-consolidated basis.

determine the denominator of its leverage ratio as calculated under the Capital Rules on a solo or solo-consolidated basis;

determine its exposure measure on a solo or solo-consolidated basis;

determine its external or internal loss-absorbing capacity on a solo or solo-consolidated basis; and

determine its external or internal LAC leverage ratio in accordance with these Rules on a solo or solo-consolidated basis.

subject to subrule (4), determine the denominator of its capital adequacy ratio as it would be calculated under the Capital Rules on a consolidated basis with reference to its LAC consolidation group;

determine its risk-weighted amount on a consolidated basis with reference to its LAC consolidation group;

determine its external or internal loss-absorbing capacity on a consolidated basis with reference to its LAC consolidation group; and

determine its external or internal LAC risk-weighted ratio in accordance with these Rules on a consolidated basis with reference to its LAC consolidation group.

determine the denominator of its leverage ratio as it would be calculated under the Capital Rules on a consolidated basis with reference to its LAC consolidation group;

determine its exposure measure on a consolidated basis with reference to its LAC consolidation group;

determine its external or internal loss-absorbing capacity on a consolidated basis with reference to its LAC consolidation group; and

determine its external or internal LAC leverage ratio in accordance with these Rules on a consolidated basis with reference to its LAC consolidation group.

in determining the contribution made to the denominator of its capital adequacy ratio by exposures of any entity that—

the resolution entity or material subsidiary must, unless otherwise approved in writing by the resolution authority, use the methodology that would apply if that entity were an authorized institution using the prescribed approaches in relation to calculation of capital adequacy ratios referred to in Part 2 of the Capital Rules which do not require the Monetary Authority to be satisfied as to any matter, or require any consent of or consultation with the Monetary Authority under that Part; and

in determining the contribution made to the denominator of its capital adequacy ratio by exposures of any entity that—

the resolution entity or material subsidiary must, unless otherwise approved in writing by the resolution authority, use the methodology that applies to that entity under the Capital Rules in determining the contribution made to the denominator of the applicable capital adequacy ratio.

an HK holding company; or

an HK affiliated operational entity.

subject to subrule (4), determine the denominator of its capital adequacy ratio as it would be calculated under the Capital Rules on a consolidated basis with reference to its LAC consolidation group if the resolution entity or material subsidiary were an authorized institution;

determine its risk-weighted amount on a consolidated basis with reference to its LAC consolidation group;

determine its external or internal loss-absorbing capacity on a consolidated basis with reference to its LAC consolidation group; and

determine its external or internal LAC risk-weighted ratio in accordance with these Rules on a consolidated basis with reference to its LAC consolidation group.

determine the denominator of its leverage ratio as it would be calculated under the Capital Rules on a consolidated basis with reference to its LAC consolidation group if the resolution entity or material subsidiary were an authorized institution;

determine its exposure measure on a consolidated basis with reference to its LAC consolidation group;

determine its external or internal loss-absorbing capacity on a consolidated basis with reference to its LAC consolidation group; and

determine its external or internal LAC leverage ratio in accordance with these Rules on a consolidated basis with reference to its LAC consolidation group.

in determining the contribution made to the denominator of its capital adequacy ratio by exposures of—

the resolution entity or material subsidiary must, unless otherwise approved in writing by the resolution authority, use the methodology that would apply if the resolution entity or material subsidiary or that entity were an authorized institution using the prescribed approaches in relation to calculation of capital adequacy ratios referred to in Part 2 of the Capital Rules which do not require the Monetary Authority to be satisfied as to any matter, or require any consent of or consultation with the Monetary Authority under that Part; and

in determining the contribution made to the denominator of its capital adequacy ratio by exposures of any entity that—

the resolution entity or material subsidiary must, unless otherwise approved in writing by the resolution authority, use the methodology that applies to that entity under the Capital Rules in determining the contribution made to the denominator of the applicable capital adequacy ratio.

the minimum Total capital ratio that the entity is required to maintain on a consolidated basis in respect of its capital consolidation group under the Capital Rules; or

if that minimum is varied under section 97F of the Banking Ordinance (Cap. 155), that minimum as so varied.

the minimum Total capital ratio that the entity is required to maintain on a consolidated basis in respect of its capital consolidation group under the Capital Rules; or

if that minimum is varied under section 97F of the Banking Ordinance (Cap. 155), that minimum as so varied.

the minimum Total capital ratio that the entity’s principal authorized institution is required to maintain on a consolidated basis in respect of its capital consolidation group under the Capital Rules; or

if that minimum is varied under section 97F of the Banking Ordinance (Cap. 155), that minimum as so varied.

to reduce its resolution component ratio; or

to reduce an increase to its resolution component ratio that would apply to it as a result of a variation made under section 97F of the Banking Ordinance (Cap. 155).

the reduction requested; and

the grounds for the reduction requested.

any stabilization options expected to be applied under the preferred resolution strategy covering the resolution entity;

any risks to resolvability related to the fact that there may be entities that are in the resolution entity’s resolution group but not in its LAC consolidation group, and whose assets are therefore not otherwise taken into account when determining the resolution entity’s LAC requirements; and

any other matters the resolution authority considers relevant.

specifying the resolution authority’s proposed variation;

specifying the grounds for the proposed variation; and

including a statement that the resolution entity may, within 14 days (or a longer period allowed by the resolution authority), make written representations to the resolution authority on any matter specified in the notice.

specifying the resolution authority’s proposed decision not to vary the resolution component ratio;

specifying the grounds for the proposed decision; and

including a statement that the resolution entity may, within 14 days (or a longer period allowed by the resolution authority), make written representations to the resolution authority on any matter specified in the notice.

serve a further written notice on the resolution entity—

decide not to make the proposed variation.

confirming the proposed decision not to vary the resolution component ratio; or

notifying the resolution entity of the variation, as determined by the resolution authority.

a decision to vary a resolution entity’s resolution component ratio;

a decision not to vary a resolution entity’s resolution component ratio following the resolution entity’s application under rule 19(3).

the preferred resolution strategy covering the material subsidiary;

the likely availability of additional financial resources within the material subsidiary’s resolution group that could be expected to be deployed to restore to viability any authorized institution in the material subsidiary’s material sub-group; and

any other matters the resolution authority considers relevant.

90% where the preferred resolution strategy covering the material subsidiary envisages all internal loss-absorbing capacity issued by the material subsidiary being issued directly to an entity that is not incorporated in Hong Kong and is not a re-domiciled entity; or

100% where the preferred resolution strategy covering the material subsidiary envisages some or all internal loss-absorbing capacity issued by the material subsidiary being issued directly to an entity that is incorporated in Hong Kong or is a re-domiciled entity. (14 of 2025 s. 280)

specifying the resolution authority’s proposed increase;

specifying the grounds for the proposed increase; and

including a statement that the material subsidiary may, within 14 days (or a longer period allowed by the resolution authority), make written representations to the resolution authority on any matter specified in the notice.

serve a further written notice on the material subsidiary—

decide not to make the proposed increase.

an external LAC risk-weighted ratio that is not less than its minimum external LAC risk-weighted ratio, calculated on a consolidated basis with reference to its LAC consolidation group; and

an external LAC leverage ratio that is not less than its minimum external LAC leverage ratio, calculated on a consolidated basis with reference to its LAC consolidation group.

an external LAC risk-weighted ratio that is not less than its minimum external LAC risk-weighted ratio multiplied by its solo LAC scalar, calculated on—

an external LAC leverage ratio that is not less than its minimum external LAC leverage ratio multiplied by its solo LAC scalar, calculated on—

an internal LAC risk-weighted ratio that is not less than its minimum internal LAC risk-weighted ratio, calculated on a consolidated basis with reference to its LAC consolidation group; and

an internal LAC leverage ratio that is not less than its minimum internal LAC leverage ratio, calculated on a consolidated basis with reference to its LAC consolidation group.

an internal LAC risk-weighted ratio that is not less than its minimum internal LAC risk-weighted ratio multiplied by its solo LAC scalar, calculated on—

an internal LAC leverage ratio that is not less than its minimum internal LAC leverage ratio multiplied by its solo LAC scalar, calculated on—

the extent to which the solo LAC scalar being set at 100% would result in the resolution entity or material subsidiary having to maintain a greater amount of loss-absorbing capacity than required to meet its LAC requirements on a consolidated basis;

the extent to which the solo LAC scalar being set at 100% would impact on the quantity and availability of non-pre-positioned loss-absorbing capacity; and

any other matters the resolution authority considers relevant.

the amount of loss-absorbing capacity that the resolution entity or material subsidiary needs to maintain to meet its LAC requirements on a solo basis; and

any holdings by the resolution entity or material subsidiary of loss-absorbing capacity maintained by other members of its resolution group that those other members are required to maintain to meet—

a resolution entity or material subsidiary that is an authorized institution or HK holding company is a global systemically important bank;

the resolution entity or material subsidiary, or the group of companies of which it is a member, or another member of that group (as the case may be) was designated as a global systemically important bank by the Financial Stability Board on or before 31 December 2015 and has been continuously so designated since its date of designation;

the global systemically important bank is required by section 21 of the TLAC term sheet to meet minimum TLAC requirements from 1 January 2019; and

the classification date for the resolution entity or material subsidiary is on or before 30 September 2021.

in the case of a resolution entity—

in the case of a material subsidiary—

if a resolution entity is required by these Rules to meet a minimum external LAC risk-weighted ratio, the external LAC risk-weighted ratio that it would have if its external loss-absorbing capacity was equal to the sum of its relevant debt instruments must be not less than one-third of its minimum external LAC risk-weighted ratio;

if a resolution entity is required by these Rules to meet a minimum external LAC leverage ratio, the external LAC leverage ratio that it would have if its external loss-absorbing capacity was equal to the sum of its relevant debt instruments must be not less than one-third of its minimum external LAC leverage ratio;

if a resolution entity is subject to a requirement under rule 32(2)(a)(i), the external LAC risk-weighted ratio that it would have if its external loss-absorbing capacity was equal to the sum of its relevant debt instruments must be not less than one-third of the external LAC risk-weighted ratio required by rule 32(2)(a)(i); and

if a resolution entity is subject to a requirement under rule 32(2)(a)(ii), the external LAC leverage ratio that it would have if its external loss-absorbing capacity was equal to the sum of its relevant debt instruments must be not less than one-third of the external LAC leverage ratio required by rule 32(2)(a)(ii).

constitutes a liability; and

is issued by the resolution entity.

if a material subsidiary is required by these Rules to meet a minimum internal LAC risk-weighted ratio, the internal LAC risk-weighted ratio that it would have if its internal loss-absorbing capacity was equal to the sum of its relevant debt instruments must be not less than one-third of its minimum internal LAC risk-weighted ratio;

if a material subsidiary is required by these Rules to meet a minimum internal LAC leverage ratio, the internal LAC leverage ratio that it would have if its internal loss-absorbing capacity was equal to the sum of its relevant debt instruments must be not less than one-third of its minimum internal LAC leverage ratio;

if a material subsidiary is subject to a requirement under rule 32(2)(b)(i), the internal LAC risk-weighted ratio that it would have if its internal loss-absorbing capacity was equal to the sum of its relevant debt instruments must be not less than one-third of the internal LAC risk-weighted ratio required by rule 32(2)(b)(i); and

if a material subsidiary is subject to a requirement under rule 32(2)(b)(ii), the internal LAC leverage ratio that it would have if its internal loss-absorbing capacity was equal to the sum of its relevant debt instruments must be not less than one-third of the internal LAC leverage ratio required by rule 32(2)(b)(ii).

constitutes a liability; and

is issued directly or indirectly to, and held directly or indirectly by, the resolution entity or non-HK resolution entity in the material subsidiary’s resolution group.

the LAC requirements of, and the capital adequacy ratios maintained by, the resolution entity or material subsidiary;

the preferred resolution strategy covering the resolution entity or material subsidiary; and

any other matters the resolution authority considers relevant.

a stabilization option is applied in respect of an asset, right or liability of, or a security issued by, a resolution entity or material subsidiary;

any Additional Tier 1 capital instrument, Tier 2 capital instrument or non-capital LAC debt instrument of a resolution entity or material subsidiary is written down or converted into ordinary shares as contemplated in the terms and conditions of the instrument;

a capital reduction instrument is made in respect of a resolution entity or material subsidiary;

anything is done in accordance with an agreement made, with the written consent of the resolution authority, between a resolution entity or material subsidiary and any of its creditors to write down, cancel, convert, change the form of or otherwise modify any of its LAC instruments.

the period of 24 months after the occurrence; or

any longer period notified in writing to the resolution entity or material subsidiary by the resolution authority.

specifying the details of the proposed remedial action and the proposed period in which it is to be taken;

specifying the grounds for the proposed requirement to take remedial action; and

including a statement that the entity may, within 14 days (or a longer period allowed by the resolution authority), make written representations to the resolution authority on any matter specified in the notice.

serve a further written notice on the entity—

decide not to require the entity to take remedial action.