Rule on Domestic Systemically Important Deposit-Taking Institutions (Effective: 27 May 2024)

Summary

This is a CIMA Rule setting capital and conduct requirements for Domestic Systemically Important Deposit Taking Institutions (D-SIDTIs) — deposit-taking institutions (banks, including development banks, cooperative societies, and building societies) that CIMA has formally designated as domestically systemically important under its companion Regulatory Policy. It does not itself designate any institution; it only applies once CIMA has notified an institution of D-SIDTI status.

The Rule requires designated institutions to hold and maintain a Higher Loss Absorbency (HLA) capital buffer on top of any minimum capital requirement, using CAR-eligible instruments where an MCR applies, or Tier 1 instruments where no MCR is stipulated. It also imposes several related obligations:

• HLA timing rules: Sets timing rules for when new, increased, reduced or removed HLA requirements take effect.
• Self-reporting: Requires immediate self-reporting if capital (including the HLA buffer) falls to or below the required level.
• Distribution restrictions: Imposes restrictions on discretionary distributions as communicated by the Authority.
• Additional reporting: Requires D-SIDTIs to submit any additional reporting requested by CIMA unless exempted.
• Breaches: Breaches are handled under CIMA's Enforcement Manual and other statutory powers.

The Rule is stated to come into effect within twelve months of its Gazette publication, and per the accompanying metadata the Rule itself became effective 27 May 2024, with a related Regulatory Policy effective 23 May 2025.

Key obligations

• A D-SIDTI must hold and maintain a capital buffer sufficient to meet the HLA Requirement communicated by the Authority.
• Where an MCR applies, the HLA buffer must be met with capital instruments eligible for the minimum CAR computation; where no MCR applies, it must be met with Tier 1 capital instruments unless the Authority advises otherwise.
• A newly designated D-SIDTI (or one migrating to a higher HLA bucket) must meet the new HLA Requirement within twelve months of notification by the Authority, unless otherwise indicated.
• A D-SIDTI migrating to a lower bucket or ceasing D-SIDTI status must comply with the revised (lower/nil) HLA Requirement immediately upon notification, unless otherwise specified.
• A D-SIDTI must immediately notify the Authority when its capital (including the HLA buffer) is equal to or falls below the required level.
• A D-SIDTI must comply with any restrictions on discretionary distributions communicated by the Authority under the related Regulatory Policy, unless otherwise specified.
• A D-SIDTI must submit any additional reporting requested by the Authority unless an exemption is granted.

Applies to

Domestic Systemically Important Deposit Taking Institutions (D-SIDTIs), deposit taking institutions, banks, development banks, cooperative societies, building societies

Deadlines

• within twelve (12) months upon notification by the Authority: A new or increased HLA Requirement (due to new D-SIDTI designation or migration to a higher bucket) becomes applicable to the institution within this period, unless otherwise indicated by the Authority.
• immediately upon notification by the Authority: A reduced or nil HLA Requirement (due to migration to a lower bucket or cessation of D-SIDTI status) becomes applicable immediately, unless otherwise specified.
• within twelve (12) months of the date the Rule is published in the Gazette: Stated effective date mechanism for the Rule coming into force.