The HKMA issued an updated Guideline on Minimum Criteria for Authorization on 27 February 2026, superseding the previous Guideline issued in 2022. The update focuses on, among other things, the HKMA’s expectations on resolution and recovery planning by AIs. A summary of the main changes is set out below.
- AIs must maintain specific liquidity and funding capabilities in business as usual in order to support the orderly resolution of an AI. The HKMA’s related expectations are set out in the Code of Practice chapter on “Resolution Planning – Liquidity and Funding in Resolution” (LFIR-1), the Code of Practice chapter on “Resolution Planning – Continuity of Access to Financial Market Infrastructure Services” (FMI-1) and the Code of Practice chapter on “Resolution Planning – Operational Continuity in Resolution” (OCIR-1) respectively.
- The HKMA may require an AI to prepare and maintain a recovery plan in the event of severe stress and prior to the implementation of an orderly resolution or liquidation. The plan must detail specific actions to stabilize and restore the AI’s viability when under severe stress. The HKMA’s expectations on recovery planning are further elaborated in SPM module RE-1 “Recovery Planning”.
- Under the FIRO, the HKMA as the resolution authority for the banking sector, may use different stabilization options to manage a failing AI. While the HKMA sets resolution standards and conducts resolution planning for each individual AI, generally the HKMA will prioritize resolution planning for locally-incorporated AIs with total consolidated assets exceeding HK$150 billion, as their failure would be more likely to pose a threat to Hong Kong’s financial stability.
For more details, please refer to the updated Guideline.
