meta_id 3353107

On July 24, 2026, the Hong Kong Monetary Authority (HKMA) issued two Code of Practice chapters regarding valuation in resolution under the Financial Institutions (Resolution) Ordinance (Cap. 628) (FIRO). The chapters—"The HKMA's Approach to Valuation in Resolution" (VIR-1) and "Valuation in Resolution Capabilities" (VIR-2)—establish the HKMA's framework and expectations for how authorized institutions must conduct valuations during resolution proceedings. Valuation in resolution is a critical component of the HKMA's resolution planning and execution framework. These chapters set out the HKMA's methodology for assessing the value of failing or failed institutions and their assets during resolution, which is essential for determining the feasibility of resolution strategies and protecting depositors and creditors. The guidance applies to all authorized institutions in Hong Kong and forms part of the broader resolution standards and resolution planning requirements established under FIRO. VIR-1 outlines the HKMA's overarching approach to valuation methodology, principles, and standards that institutions must follow. VIR-2 addresses the operational and technical capabilities that authorized institutions must develop and maintain to support effective valuation processes during resolution scenarios. Together, these chapters ensure that institutions are adequately prepared to execute valuations that meet regulatory standards and support orderly resolution outcomes. The Code of Practice chapters supersede previous guidance and represent the current regulatory requirements for authorized institutions. All authorized institutions should review the guidance and ensure their valuation capabilities and processes align with the HKMA's expectations outlined in VIR-1 and VIR-2. REFERENCES: Hong Kong Monetary Authority. "Code of Practice Chapters Regarding Valuation in Resolution." July 24, 2026. Available at: https://www.hkma.gov.hk/