Further updates on the application and scope of Hong Kong’s loss absorbing capacity rules

Hong Kong’s new loss absorbing capacity (“LAC”) rules (the “LAC Rules”) which are due to come into effect on 14 December 2018, the Hong Kong Monetary Authority (“HKMA”) and the Hong Kong Government have published a set of responses (the “Responses”) clarifying certain details around the application and scope of the LAC Rules.

 

In this note we examine the key points set out in the Responses, as well as some practical considerations for issuers contemplating the issue of LAC eligible instruments going forward.