| (1) | Subject to the provisions of subregulation (3), a bank shall disclose in its annual financial statements and other disclosures to the public, reliable, relevant and timely qualitative and quantitative information that enable users of that information, among other things, to make an accurate assessment of the bank’s financial condition, including, but not limited to, its capital adequacy position and its liquidity position, financial performance, its leverage ratio, ownership, governance, business activities, risk profile and risk management practices, provided that— |
[Words preceding regulation 43(1)(a) substituted by regulation 24(a) of Notice No. 297, GG 40002, dated 20 May 2016]
| (a) | the bank shall have in place a formal board approved policy relating to disclosure, which policy, as a minimum— |
| (i) | shall specify the approach that the bank adopted in order to determine the materiality, nature and extent of information that will be disclosed to the public; |
| (ii) | shall be sufficiently robust to ensure that the bank— |
| (A) | establishes and maintains appropriate internal control processes and procedures relating to the qualitative and quantitative information disclosed to the public; |
| (B) | assesses on a regular basis the appropriateness of information disclosed to the public; |
| (C) | establishes and maintains an appropriate process to validate the information disclosed to the public; |
| (D) | regularly assesses the frequency and materiality of information disclosed to the public; |
| (E) | is able to continuously determine the extent to which the required information may already be included in the bank's accounting disclosure requirements and to what extent the bank has to disclose information in addition to the bank's accounting disclosure requirements; |
| (b) | when compliance with the minimum required information specified in subregulation (2) below is not sufficient to provide a true and fair presentation of the bank’s financial condition, including its capital adequacy position and its liquidity position, and financial performance, leverage ratio, business activities, risk profile and risk-management practices, the bank shall disclose relevant additional information; |
[Regulation 43(1)(b) substituted by regulation 24(b) of Notice No. 297, GG 40002, dated 20 May 2016]
| (c) | the bank's annual financial statements and other disclosures to the public shall present or disclose each material item separately. Information is material if its omission or misstatement could change or influence the judgement or decision of a user relying on that information to take, amongst other things, economic or investment decisions; |
| (d) | the minimum required publicly disclosed information, amongst other things, shall be consistent with the manner in which the board of directors and the senior management of the bank assess and manage the bank's risk exposures; |
| (e) | the bank shall, as a minimum, disclose to the public— |
| (i) | such qualitative and quantitative information as may be specified in subregulation (2), related to the broad categories of information specified in the said subregulation (2); and |
| (ii) | such further qualitative information and quantitative information as may be directed in writing by the Authority, in respect of such categories of information as may be directed in writing by the Authority; |
[Regulation 43(1)(e)(i) and (ii) substituted by section 13(a) of Notice No. 724, GG44003, dated 18 December 2020 - effective 1 January 2021]
| (f) | the bank shall on a regular basis, but not less frequently than— |
| (i) | once a year disclose to the public qualitative information in respect of the bank’s risk management objectives and policies, reporting system and general definitions, |
provided that, in all relevant cases, the bank shall publish material information that is subject to rapid or material change as soon as possible;
[Regulation 43(1)(f) inserted by section 13(b) of Notice No. 724, GG44003, dated 18 December 2020 - effective 1 January 2021 -subsequent paragraphs have been renumbered]
| (A) | the required information shall be included either in the bank’s published financial statements or, as a minimum, the published financial statements shall provide a direct link to the completed disclosure on the bank’s website; |
| (B) | the bank shall make available on its website an archive of all the relevant required templates relating to reporting periods after the implementation of any relevant specified disclosure requirement, which archive period shall be aligned to the archive period specified in the relevant legislation related to annual financial statements issued from time to time, but which period shall in no case be less than five years; |
| (C) | irrespective of the location used by the bank for the required disclosure, that is, the bank’s published financial statements or its website, all the relevant required information shall be disclosed in the relevant format specified in these Regulations; |
| (D) | in order to prevent a divergence of templates across jurisdictions, which may undermine the objectives of consistency and comparability, no bank shall add, delete or change any definition or numbering of any row or item from the common reporting templates specified in these Regulations; |
| (E) | in the case of the main features template specified in subregulation (2)(c)(i)(F) of this regulation 43, and the disclosure of the full terms and conditions of capital instruments as envisaged in subregulation (2)(c)(i) of this regulation 43— |
| (i) | the bank shall report each relevant regulatory capital instrument, including common or ordinary shares, in a separate column of the template, such that the completed template would provide a ‘main features report’ that summarises all of the regulatory capital instruments of the relevant bank or banking group; |
| (ii) | the bank shall update the relevant disclosures whenever a new capital instrument is issued and included in the bank’s capital, or whenever there is a redemption, conversion, write-down or other material change in the nature of an existing capital instrument; |
| (F) | in the case of information related to the bank’s capital and reserve funds, whenever— |
| (i) | the bank discloses any ratio that involves a component of regulatory capital, the bank shall ensure that such disclosure is accompanied by a sufficiently comprehensive explanation of how that ratio was calculated; |
| (ii) | a specific component of capital, including capital instruments or regulatory adjustments, benefits from any transitional arrangement or provision, the bank shall disclose to the public the relevant details relating to the benefits of the said transitional arrangement or provision; |
| (G) | in the case of the bank’s leverage ratio, the bank shall, as a minimum, irrespective of the frequency of the publication of the bank’s financial statements, on a quarterly basis— |
| (i) | disclose to the public— |
| (aa) | the relevant numerator for its leverage, that is, the bank’s tier 1 capital and reserve funds; |
| (bb) | the relevant denominator for its leverage, that is, the bank’s relevant exposure measure; and |
| (cc) | the bank’s leverage ratio, |
Provided that—
| (i) | as a minimum, the aforesaid numbers shall be the relevant number at the end of the relevant reporting quarter; |
| (ii) | subject to the prior written approval of and such conditions as may be specified in writing by the Registrar, the bank may calculate its leverage ratio based on either daily or monthly average numbers; |
| (ii) | disclose to the public— |
| (aa) | the relevant numbers and ratios for the preceding three quarter-ends; |
| (bb) | the relevant detail and source(s) of material differences between the bank’s total balance sheet assets, net of any relevant on-balance sheet derivative and SFT assets, as reported in the bank’s published financial statements, and the bank’s on-balance sheet exposures measure as reported in item 1 of the common disclosure template specified in subregulation (2)(c)(iv)(B) below; |
| (cc) | the relevant detail related to key drivers of— |
| (i) | material changes that relate to the numerator; |
| (ii) | material changes that relate to the denominator; and/or |
| (iii) | material changes in the bank’s leverage ratio, |
observed from the end of the previous reporting period to the end of the current reporting period;
| (H) | in the case of information related to the bank’s Liquidity Coverage Ratio (LCR)— |
| (i) | the bank shall disclose to the public sufficiently detailed qualitative information to facilitate a clear understanding of the bank’s liquidity position, which qualitative information may include: |
| (aa) | the main drivers of the LCR, and the evolution of the contribution of inputs to the calculation of the LCR over time; |
| (bb) | intra-period changes as well as changes over time; |
| (cc) | the composition of HQLA; |
| (dd) | any concentration of funding sources; |
| (ee) | derivative exposures and potential collateral calls; |
| (ff) | any material currency mismatches in the LCR; |
| (gg) | a description of the degree of centralisation of liquidity management and interaction between the relevant bank’s or group’s respective units; and |
| (hh) | other inflows and outflows in the LCR calculation that are not captured in the common template specified in these Regulations for LCR, but which the bank considers to be relevant for its liquidity profile; |
| (ii) | the bank may wish to disclose qualitative information in addition to the required information specified in sub-item (i) above to enable market participants to gain a more thorough understanding of the bank’s internal liquidity risk management and positions, which qualitative information may include— |
| (aa) | governance of liquidity risk management, including— |
| (ii) | structure and responsibilities for liquidity risk management; |
| (iii) | internal liquidity reporting; and |
| (iv) | communication of the liquidity risk strategy, policies and practices across business lines and with the board of directors; |
| (bb) | the funding strategy, including policies on diversification in the sources and tenor of funding, and whether the funding strategy is centralised or decentralised; |
| (cc) | the bank’s liquidity risk mitigation techniques; |
| (dd) | an explanation of how stress testing is used; and |
| (ee) | an outline of the bank’s contingency funding plans; |
| (iii) | the relevant required quantitative information specified in subregulation (2)(c)(v)(A) of this regulation 43 shall be the simple average of daily observations during the preceding quarter, that is, the average during a period of, typically, 90 days, provided that— |
| (aa) | subject to the prior written approval of and such conditions as may be specified in writing by the Registrar, a bank may be exempted from the requirement to calculate and disclose a daily average amount up to the first reporting period after 1 January 2017, in which case the bank shall calculate and disclose an average amount based on the relevant month-end amounts; |
| (bb) | the relevant average shall be calculated after the application of any relevant haircuts, inflow and outflow rates, and caps; |
| (cc) | when the bank reports on— |
| (i) | a semiannual basis, the average LCR shall be reported in respect of each of the two relevant preceding quarters; |
| (ii) | an annual basis, the LCR shall be reported for each of the relevant preceding four quarters; |
| (iv) | the bank shall calculate any relevant required unweighted amount related to a specified category of outflows or inflows in accordance with the formula specified below: |
Total unweighted amount of specified categoryQI =
(h)(iv).png)
where:
T equals the number of observations in period Qi.
| (v) | the bank shall calculate any relevant required weighted amount related to a specified category of outflows or inflows in accordance with the formula specified below: |
Total weighted amount of specified categoryQI =
(h)(v).png)
where:
T equals the number of observations in period Qi.
| (vi) | the bank shall calculate its LCR as the average of observations of the LCR, in accordance with the formula specified below: |
(h)(vi).png)
| (vii) | the bank shall in all relevant cases publish the number of data points used in the calculation of the aforesaid average amounts; |
| (viii) | the relevant required information shall be presented in a single currency whenever the information is calculated or required to be calculated on a consolidated basis; |
| (ix) | the bank may wish to disclose quantitative information in addition to the required information specified in subregulation (2)(c)(v)(A) of this regulation 43, to provide market participants with a broader perspective of the bank’s liquidity risk position and management, which additional quantitative information may include— |
| (aa) | concentration limits on collateral pools and sources of funding in respect of products and counterparties; |
| (bb) | liquidity exposures and funding needs at the level of individual legal entities, foreign branches and subsidiaries, taking into account legal, regulatory and operational limitations on the transferability of liquidity; and |
| (cc) | balance sheet items and off-balance sheet items broken down into maturity buckets and the resultant liquidity gaps; |
[Regulation 43(1)(e)(ii) inserted by regulation 24(c) of Notice No. 297, GG 40002, dated 20 May 2016 - subsequent paragraphs have been renumbered]
| (iii) | once a year disclose to the public the relevant required qualitative and quantitative information related to remuneration, specified in subregulation (2)(f) below; |
| (iv) | on a quarterly basis, disclose to the public quantitative information in respect of— |
| (A) | the bank's tier 1 capital, including the bank's tier 1 capital adequacy ratio; |
| (B) | the bank's total capital, including the bank's total capital adequacy ratio; |
| (C) | the components of capital; |
| (D) | the total required amount of capital and reserve funds; |
| (E) | the bank's relevant countercyclical buffer requirement, which buffer requirement shall be based on the latest relevant jurisdictional countercyclical buffers available at the date that the bank calculates its minimum capital requirement, provided that the bank shall also disclose to the public the relevant geographic distribution of its private sector credit exposures used in the calculation of the said buffer requirement; |
| (F) | any risk exposure or other item that is subject to rapid or material change, |
| (v) | on a semi-annual basis, disclose to the public the qualitative and quantitative information, other than the information referred to in subparagraphs (i) to (iv) above, envisaged in subregulation (2) below, |
[Regulation 43(1)(e)(v) substituted by regulation 24(d) of Notice No. 297, GG 40002, dated 20 May 2016 - subsequent paragraphs have been renumbered]
provided that, in all relevant cases, the bank shall publish material information that are subject to rapid or material change as soon as possible;
[Final proviso of regulation 43(1)(e) substituted by regulation 24(e) of Notice No. 297, GG 40002, dated 20 May 2016]
| (g) | at the discretion of the management of the bank, the bank shall determine appropriate additional mediums and locations to disclose the required information to the public; |
| (h) | the bank's disclosure to the public in terms of the provisions of this regulation 43— |
| (i) | shall be consistent with the bank's audited financial statements; |
| (ii) | shall be subject to appropriate internal control and verification; |
| (i) | when the information required to be disclosed in terms of the provisions of this regulation 43 differs from any prescribed listing requirements or disclosure requirements in terms of Financial Reporting Standards, the bank shall in an appropriate manner explain any material differences between the said disclosure requirements; |
| (j) | on prior written application by the bank and/or subject to such conditions as may be specified in writing by the Registrar, the requirements of this regulation 43 place no duty on the bank to disclose to the public proprietary or confidential information, that is— |
| (i) | information in respect of, for example, products or systems that, if shared with competitors, is likely to render the bank's investment in the said products or systems less valuable or undermine the bank's competitive position; or |
| (ii) | information that is provided in terms of a legal agreement, which information is classified as confidential information; |
| (k) | except for information that forms part of a bank's audited financial statements as a result of requirements relating to Financial Reporting Standards, unless otherwise specified in writing by the Registrar, the required additional information that has to be disclosed by the bank to the public in terms of the provisions of this regulation 43 may be, but is not required to be, subject to external audit. |
