Company: HBCYF
Filing Date: 2025-02-25
Form Type: 424B5
Source: 0001193125-25-034819
Chunk: 43

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-25
Form: 424B5
Chunk 43
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IFRS 9 under CRR to the end of 2024. These provisions were retained in UK CRR, but the transitional arrangements expired at the end of 2024. Further, our minimum regulatory capital requirements may increase as a result of increased provisioning
under stress associated with our adoption of IFRS 9 as of January 1, 2018, the magnitude of which will depend upon several factors, including the specified stress scenario. See “—Risks Relating to the Securities—The circumstances surrounding or triggering an Automatic Conversion are unpredictable.”

Separately, certain aspects of the UK
regulatory regime may restrict or prohibit us further from making interest payments on the Securities in certain circumstances. For example, under the UK Banking Act 2009, as amended (the “Banking Act”), which implemented the EU Bank
Recovery and Resolution Directive (“BRRD”), the Bank of England is required to set a minimum requirement for own funds and eligible liabilities (“MREL”) for banks in the UK. The current UK MREL regime, which took effect on
January 1, 2019 at a level which increased until January 1, 2022, has been designed to be broadly compatible with the term sheet published by the Financial Stability Board (the “FSB”) on total loss absorbing capacity
(“TLAC”) requirements for G-SIIs. Furthermore, with effect from June 27, 2019, G-SIIs (including us) are subject to a harmonized MREL requirement, in
addition to institution-specific requirements under the BRRD regime. The Bank of England is currently consulting on proposed amendments to its approach to setting MREL requirements which seek, among other things, to ensure that the UK’s MREL
framework is simplified and consolidated and keeps up to date with, and is responsive to, wider developments in financial regulation and markets.

Under PRA Supervisory Statement SS16/16 (“SS16/16”), if a UK firm does not have, or expects that it will not have, sufficient CET1,
in addition to any own funds and liabilities counted towards its MREL, to meet the amount of CET1 it should maintain for the purposes of risk-weighted capital and leverage buffer requirements, it will be considered to have used, or be about to use,
the buffers of the regime where the total amount of capital required to meet minimum requirements plus buffers (risk-weighted capital or leverage) is largest. The firm may have to notify the PRA as soon