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GRC Professional : GRC Spring 2011
7 hong kong issues guidance on credit reference agencies The Hong Kong Monetary Authority (HKMA) has issued a guidance module on the sharing and use of consumer data through a credit reference agency. The guidance follows public consultation of the sharing of mortgage data for credit assessment. Among the guidance is the requirement for authorised institutions (AIs) to “seek the prescribed consent of their existing mortgage customers and mortgage loan applicants before uploading their pre-existing mortgage data to the credit reference agency”. hong kong warning for risk managers $250,000 fine for timber hill upheld A $250,000 fine for stockbroking company Timber Hill over Australian Securities Exchange (ASX) breaches has been upheld. The ASX Disciplinary Tribunal had found Timber Hill liable for eight ASX Market Rule contraventions related to securities purchases that took place on several occassions throughout 2009.An appeal by Timber Hill to the ASX’s Appeal Tribunal was dismissed. FinAnCiAl seRviCes Hong Kong’s Securities and Futures Commission (SFC) has issued a reminder about the importance of appropriate risk management and ef fective internal controls, in light of recent market volatility. “Senior management of licensed corporations are responsible for properly managing the risks and operations of their firms, including evaluation of the firm’s risk exposures and maintenance of appropriate risk management policies and control procedures and adequate resources,” SFC said. “Under changing market conditions, any failure to prudently manage risks, or mistakes or omissions in operations may result in significant adverse financial and/or operational consequences.” SFC provides the following advice: • Regularly review the effectivies of risk management policies and procedures on liquidity, credit and market risks. • Prudently review the credit limits, trading limits and position limits granted to individual client accounts. • Promptly collect outstanding margin calls from clients. • Closely monitor concentration risks in client credits, client collateral and proprietary positions and avoid undue concentration risk. • Rigorously assess and monitor the impacts on the firm’s financial position of extreme market conditions, such as by conducting stress testing of the firm’s liquid capital and liquidity regularly and in times of volatile market movements. Blake dawson
GRC Summer 2012