When too-big-to-fail financial companies do fail, Hong Kong regulators — at the expense of creditors — want to make sure there is no fallout for ordinary customers.

On Oct. 9, three financial regulatory bodies and a government agency in the city published a response to the second stage of public consultation on proposals to set up a cross-sector resolution regime for financial institutions. They received about 30 submissions between January and April from groups including industry associations and companies.

Among other things, the regulators want to let depositors off the hook when bailing in creditors of a distressed financial company. As of December 2014, customer deposits, comprising funds in current and savings accounts, and those with maturities of five years or less, made up 68% of the overall liability structure of Hong Kong banks rated by Moody's, according to the rating agency.

"Having reflected further on the potential systemic consequences of bailing in depositors, the authorities are now minded to exclude all deposits from the scope of bail-in," the authorities said in their response paper.

They plan to introduce a bill for the rules by the end of 2015 in a move that marks far-reaching collaboration among different regulators in Hong Kong, as financial companies expand operations beyond their main sectors. The Securities and Futures Commission supervises brokerages, while the Hong Kong Monetary Authority regulates banks. Insurers are under the purview of the Office of the Commissioner of Insurance, which will be replaced by the Insurance Authority in 2016.

The proposals were first outlined in a consultation paper published in January 2014, in line with G20 nations' guidelines to address concerns about failures of major financial companies following the 2008 global crisis.

"It's good to include some overarching features in the new resolution regime," Andy Leung, a banking analyst at KGI Securities, told SNL Financial.

"Hong Kong is catching up with international standards. As we know, most financial companies have diversified their businesses, and it is not easy to have different regulators to monitor each of the different segments."

For financial firms, the new regulations mean they will receive less public sector support when they are deemed nonviable. At the same time, the burden on nondeposit senior unsecured creditors will increase.

Following the publication of the initial consultation paper, Moody's said the proposals are credit negative for banks and insurers.

"As we can recall, the U.S. Federal government injected about $180 billion into [American International Group Inc.] in an effort to keep it afloat. Luckily AIG managed to survive, but I don't think it is reasonable for the government or taxpayers to bear the risks," Leung said.