Entire Section

  • PIB 4.15.7 PIB 4.15.7

    Subject to IFR Rule 5.4.16 an Authorised Firm must ensure that the sum of its Large Exposures does not exceed 800% of its Tier 1 Capital.

    Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]
    [Amended] DFSA RMI293/2021 (Made 24th February 2021). [VER38/04-21]

    • PIB 4.15.7 Guidance

      1. Exposures can arise in the Non-Trading Book and in the Trading Book from Credit Risk (for example on loans and advances) Counterparty Risk (for example, on unsettled trades and on Derivative contracts) and from Issuer risk (for example, on holdings of equities and bonds).
      2. Some Derivatives contracts may result in an Authorised Firm being exposed to an Issuer as well as the Derivatives Counterparty. For example, a Derivative referenced on a Security may result in an Exposure to the Counterparty, to the transaction and to the Issuer of the underlying Security.
      3. Examples of an Exposure are actual or potential claims on a Counterparty including contingent liabilities arising in the normal course of an Authorised Firm's business.
      4. PIB App4 includes further Rules and Guidance on:
      a. fully and partially exempt Exposures, Exposures to undisclosed Counterparties, parental guarantees and capital maintenance agreements;
      b. identification of Exposures;
      c. identification of Closely Related and Connected Counterparties, and exemptions for Connected Counterparties;
      d. measuring Exposures to Counterparties and Issuers in relation to Derivatives, equity indices, and other items; and
      e. country risk Exposure.
      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]