Free Delivery Transactions
The CRW for transactions in which an
Authorised Firmhas:(a) delivered Securitiesor commodities before receiving payment;(b) paid for Securitiesor commodities before receiving the items purchased; or(c) entered into a foreign exchange contract undertaken in the spot market or contracted for forward settlement and has released funds to its Counterpartybut has not yet received the funds in the other currency;
is calculated by the formula:
Credit RWAon free deliveries = E x CRW x the multiplier from the table below: Number of business days since delivery multiplier used for calculation of Credit RWAon free deliveries 0–15 1 16–30 5 31–45 7.5 46 or more 10
Authorised Firmhas delivered commodities or Securitiesto a Counterpartyand has not received payment: E = CV due to the Authorised Firm.
Authorised Firmhas made payment to a Counterpartyfor commodities or Securitiesand has not received them: E = MV of the commodities or Securities.
If the settlement of the transaction is to be effected across a national border,
Credit RWAneeds to be calculated only when more than one business day has elapsed since the firm has made the relevant payment or delivery.
In the case of a
Non-Trading Bookitem, an Authorised Firmmust treat an Exposurein accordance with the relevant provisions of PIB chapter 4.