Entire Section
PIB 4.10 PIB 4.10 Categorisation of Credit Risk Exposures (CR Exposures)
PIB 4.10 Guidance
This section categorises
Exposures for the purpose of determining the CRW forCR Exposures , as provided in PIB Rule 4.8.3.Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]PIB 4.10.1 PIB 4.10.1
An
Authorised Firm must categorise anyCR Exposure that is not past due for more than 90 days into one of the following asset classes:(a) cash items, which consist of:(i) cash and cash equivalents;(ii) gold bullion held in the vaults of theAuthorised Firm or on an allocated basis in the vaults of another entity to the extent that it is backed by gold bullion liabilities; and(iii) all receivable funds arising from transactions that are settled on a DvP basis which are outstanding up to and including the 4th business day after the settlement date;(b) central government andCentral Bank asset class, which consists of anyCR Exposure to a central government orCentral Bank ;(c) the PSE asset class, which consists of anyCR Exposure to a PSE;(d) the MDB asset class, which consists of anyCR Exposure to an MDB;(e) bank asset class, which consists of anyCR Exposure to a banking institution;(f) corporate asset class, which consists of anyCR Exposure to any corporation, partnership, sole proprietorship or trustee in respect of a trust, other thanExposures categorised in sub-paragraphs (a) to (e), (g) and (h);(g) regulatory retail asset class, which consists of anyCR Exposure meeting all of the following conditions:(i) theExposure is to an individual, a group of individuals, or a small business;(ii) theExposure takes the form of any of the following:(A) revolving credit and lines of credit, including credit cards and overdrafts;(B) personal term loans and leases, including instalment loans, vehicle loans and leases, student and educational loans;(C) small business credit facilities and commitments; or(D) any other product which theDFSA may specify from time to time;(iii) theExposure is one of a sufficient number ofExposures with similar characteristics such that the risks associated with such lending are reduced; and(iv) the totalExposure to any obligor or group of obligors is not more than $2 million;(h) residential mortgage asset class, which consists of anyCR Exposure meeting all of the following conditions:(i) theExposure is to an individual or a group of individuals, or if theExposure is to an entity other than an individual, theAuthorised Firm can demonstrate to theDFSA (if required to do so) that it has robust processes to ascertain that theExposure is structured to replicate the risk profile of anExposure to an individual or a group of individuals and that it is able to identify and manage the legal risks that arise in such structures;(ii) theExposure is secured against a first lien mortgage:(A) of a completed residential property; or(B) on an exceptional basis of an uncompleted residential property in a jurisdiction approved by theDFSA ;(iii) theExposure is not classified as an impaired asset in accordance withRules in this module; and(iv) theExposure is not to a corporation, partnership, sole proprietorship or trustee in respect of a trust where such corporation, partnership, sole proprietorship or trust is engaged in residential building, development or management;(i) the commercial real estate asset class, which consists of anyCR Exposure meeting all of the following conditions:(i) theExposure is to a corporation, partnership, sole proprietorship or trustee in respect of a trust; and(ii) theExposure is secured by commercial real estate; or(j) otherExposures asset class, which consists of anyCR Exposure which does not fall within any of the categories in sub-paragraphs (a) to (i).Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]PIB 4.10.1 Guidance
The
Exposures listed under item (f) include transactions settled on a payment-versus-payment basis. For avoidance of doubt, theDFSA expects that aCR Exposure to a securities firm should be categorised within the corporate asset class.Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]