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  • PIB 4.7 PIB 4.7 Simplified Approach

    • Category 3A Firms

      • PIB 4.7.1 PIB 4.7.1

        (1) This Rule applies only to an Authorised Firm in Category 3A.
        (2) Subject to (3) and (4), an Authorised Firm must apply the Simplified Approach as prescribed in PIB section A4.12 in PIB App4.
        (3) An Authorised Firm is not required to apply the Simplified Approach if it obtains prior approval of the DFSA not to do so.
        (4) After obtaining approval under (3), a firm must not revert to the Simplified Approach without further prior approval from the DFSA.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

        • PIB 4.7.1 Guidance

          1. In effect, the Simplified Approach reduces undue regulatory burden on Category 3A firms to reflect more appropriately their risk profile.
          2. In relation to (3) and (4), the DFSA may consider granting its approval for a change of approach if it is satisfied that there are no regulatory capital arbitrage opportunities. Firms should be able to demonstrate to the DFSA solid and reasonable grounds to be able to move from one approach to the other. For instance, in assessing whether or not to grant approval, the DFSA may consider whether or not there has been a material change in the business of the firm.
          Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • Category 2 Firms

      • PIB 4.7.2 PIB 4.7.2

        (1) This Rule applies only to an Authorised Firm in Category 2.
        (2) Subject to (3) and (4), an Authorised Firm may apply the Simplified Approach, as prescribed in PIB section A4.12 in PIB App4, upon obtaining prior approval to do so from the DFSA.
        (3) After obtaining approval under (2), a firm must not disapply the Simplified Approach without further prior approval from the DFSA.
        (4) The DFSA may revoke its approval under (2) and require a firm to disapply the Simplified Approach, where the DFSA considers that this is warranted by the firm's business model and risk profile.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

        • PIB 4.7.2 Guidance

          In relation to (3) and (4), the DFSA may consider granting its approval for a change of approach if it is satisfied that there are no regulatory capital arbitrage opportunities. Firms should be able to demonstrate to the DFSA solid and reasonable grounds to be able to move from one approach to the other. For instance, in assessing whether or not to grant approval, the DFSA may consider whether or not there has been a material change in the business of the firm.

          Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]