HKMA SPM CA-S-7: Term Subordinated Debt and Paid-up Term Preference Shares for Inclusion in Supplementary Capital

What does CA-S-7 require?

Gives the criteria for term subordinated debt and term preference shares in supplementary capital: general requirements (term, repayment or redemption before maturity, the limit on the amount included, the discounting requirement in the final five years), qualifying conditions for call options and step-ups, and the use of SPVs with consolidation and solo consolidation, with Annex A illustrating the discounting. Classification: a statutory guideline issued by the Monetary Authority under the Banking Ordinance §16(10); version V.1, 14.03.03; applies to locally incorporated AIs.