Cap 155M s 24 Capital structure and adequacy (Banking (Disclosure) Rules; BANKING ORDINANCE)

Contents of Section

Chapter:	155M	Title:	Banking (Disclosure) Rules	Gazette Number:	L.N. 229 of 2006; L.N. 232 of 2006
Section:	24	Heading:	Capital structure and adequacy	Version Date:	01/01/2007

(1) An authorized institution shall disclose the components of its capital base set out in the returns relating to capital adequacy it submitted to the Monetary Authority pursuant to section 63 of the Ordinance in respect of the interim reporting period.
(2) Without prejudice to the generality of subsection (1), the disclosure referred to in that subsection required of an authorized institution shall include—

(a) in the case of the institution's core capital—

(i) the institution's paid-up ordinary share capital;

(ii) the institution's paid-up irredeemable non-cumulative preference shares;

(iii) the amount standing to the credit of the institution's share premium account;

(iv) the institution's published reserves;

(v) the amount of the institution's profit and loss account;

(vi) minority interests in the equity of the institution's subsidiaries which are included in the institution's core capital; and

(vii) the total deductions from the institution's core capital;

(b) in the case of the institution's supplementary capital—

(i) the institution's reserves which are attributable to fair value gains on the revaluation of its holdings of land and buildings;

(ii) the institution's reserves which are attributable to fair value gains on the revaluation of its holdings of available-for-sale equities and debt securities (after netting of any overall deficit required to be deducted from the institution's supplementary capital under section 44(3) of the Capital Rules);

(iii) the institution's fair value gains arising from its holdings of equities and debt securities designated at fair value through profit or loss included in the institution's supplementary capital;

(iv) the amount of the institution's regulatory reserve for general banking risks;

(v) the amount of the institution's collective provisions;

(vi) the amount of the institution's surplus provisions;

(vii) the institution's perpetual subordinated debt;

(viii) the institution's paid-up irredeemable cumulative preference shares;

(ix) the institution's term subordinated debt;

(x) the institution's paid-up term preference shares; and

(xi) minority interests in—

(A) the paid-up irredeemable non-cumulative preference shares of the institution's subsidiaries (being special purpose vehicles) in excess of the amount included in the institution's core capital which are included in the institution's supplementary capital; and

(B) the paid-up irredeemable cumulative preference shares and paid-up term preference shares of the institution's subsidiaries which are included in the institution's supplementary capital;

(d) the institution's core capital after deductions;

(e) the institution's supplementary capital after deductions; and

(f) the institution's capital base.

(3) An authorized institution shall disclose—

(a) the total amount of any relevant capital shortfall in any of its subsidiaries which are not included in its consolidation group for regulatory purposes; and

(b) the names of its subsidiaries which are not included in its consolidation group.

(4) Subject to subsections (5) and (6), an authorized institution shall disclose—

(a) its capital adequacy ratio; and

(b) its core capital ratio.

(5) Where an authorized institution is required under section 98(2) of the Ordinance as read with Part 2 of the Capital Rules to calculate its capital adequacy ratio on a consolidated basis, the institution shall disclose—

(a) its capital adequacy ratio on a consolidated basis; and

(b) its core capital ratio.

(6) Where subsection (5) does not apply to an authorized institution, the institution shall disclose—

(a) its capital adequacy ratio on a solo basis; and

(b) its core capital ratio.

(7) Where an authorized institution has earmarked part of its retained earnings for maintaining its regulatory reserve to satisfy the provisions of the Ordinance for prudential supervision purposes, the institution shall disclose—

(a) this fact; and

(b) the amount of retained earnings so earmarked.

(8) In this section—
"core capital ratio" (核心資本比率), in relation to an authorized institution, means the ratio, expressed as a percentage, of the amount of the institution's core capital after making the deductions therefrom required by Part 3 of the Capital Rules, to the sum of, subject to sections 29, 30 and 31 of the Capital Rules, the institution's risk-weighted amount for credit risk, risk-weighted amount for market risk and risk-weighted amount for operational risk as determined in accordance with the Capital Rules;
"relevant capital shortfall" (有關資本短欠), in relation to a subsidiary of an authorized institution—

(a) which is a securities firm or insurance firm; and

(b) which is not the subject of a consolidation requirement imposed on the institution,

means that amount which is deducted from the institution's core capital and supplementary capital pursuant to section 48(2)(h) of the Capital Rules.