Revised HKMA Supervisory Policy Manual CR-G-7 Guidelines

This document is a technical report detailing the updates to the Supervisory Policy Manual (SPM) module CR-G-7, which focuses on collateral and guarantees for credit risk management. The revised guidelines, published by the Hong Kong Monetary Authority (HKMA) in April 2025, supersede the previous version from 2001 and aim to enhance the management of collateral and guarantees within Authorised Institutions (AIs). Key changes include enhanced definitions of Credit Risk Mitigation (CRM), broadened scope of application, and increased expectations for governance and oversight by the Board of Directors. The report outlines specific areas such as CRM management policies, eligibility criteria, and valuation of collateral, emphasizing the need for more stringent controls and documentation. Additionally, it addresses common challenges faced by banks in implementing these guidelines, including capability building, governance policy gaps, and operational complexities. A two-year compliance period is mandated for AIs to adapt to these changes, aligning with the new Basel III requirements.