Entire Section

  • Prudential Returns Module (PRU) [VER4/09-07]

    The Prudential Returns Module was amended by GM5/2007 and replaced by PRU-EPRS [VER1/12-07].

    • PRU 1 PRU 1 Introduction

      • PRU 1.1 PRU 1.1 Application

        • PRU 1.1.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • Guidance

          1. This Sourcebook (PRU) is relevant to a Person to whom PIB or PIN applies.
          2. Chapter 2 contains the forms referred to in PIB.
          3. Chapter 3 contains instructional guidelines in respect of the forms in Chapter 4.
          4. Chapter 4 contains the forms referred to in PIN.
          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 1.2 PRU 1.2 Defined terms

        • Guidance

          Defined terms are identified throughout the forms by the capitalisation of the initial letter of a word or each word of a phrase and are defined in the Glossary module (GLO) of the DFSA’s Rulebook. Unless the context otherwise requires, where capitalisation of the initial letter is not used, an expression has its natural meaning.

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 1.2.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

    • PRU 2 PRU 2 PIB Forms

      • PRU 2.1 PRU 2.1 Forms PIB 1–100

        Purpose of these forms

        An Authorised Firm must submit the appropriate forms contained in this chapter in accordance with its category as defined in PIB appendix 7 and at the frequency stated in that appendix.

        Notes for completing these forms

        •   All figures must be typed and the declaration (in form PRU PIB10) signed by the person authorised to sign the return in accordance with PIB Rule 1.6.1.
        •   The Authorised Firm's name, licence number and reporting period should be identified on each form.
        •   Unless otherwise agreed with the DFSA, the Authorised Firm or Group's reporting currency must be in US Dollars.
        •   Within the forms 'N' represents the reports for the current period and 'N-1' should contain figures provided in the previous period's reporting statements. For the avoidance of doubt, for a reporting statement that is made on a quarterly basis, 'N-1' will be represent the previous quarter's comparators, whereas for an annual reporting statement, 'N-1' will be the prior year's reporting statement.
        •   Figures that related to expenses, losses or other negative amounts should be entered in brackets '(xxx)'.
        •   Forms must be presented in the English language.
        •   Authorised Firms are reminded that instructional guidelines are provided in form PRU section 2.2 which provides further detail on individual sections and boxes of the forms.
        •   When completed, submit the forms in line with SUP chapter 8. You may send applications by post or hand delivered and addressed to your usual supervisory contact.

        The address for postal submission is:

        DUBAI FINANCIAL SERVICES AUTHORITY
        SUPERVISION DEPARTMENT
        LEVEL 13, THE GATE
        PO BOX 75850
        DUBAI, UAE

        Amended from DFSA GM/2/2007 (Made 5 July 2007). [VER3/08-07]

        • PRU PIB1 PRU PIB1 Balance Sheet

          Please download the Form in PDFPDF format.

          • PRU PIB1 Appendix 1 — Detail of Non-Trading Book Assets

            Please download the Form in PDFPDF format.

          • PRU PIB1 Appendix 2 — Detail of Non-Market Risk in the Trading Book

            Please download the Form in PDFPDF format.

          • PRU PIB1 Appendix 3 — Detail of Market Risk in the Trading Book

            Please download the Form in PDFPDF format.

          • PRU PIB1 Appendix 4 — Calculation of DCR

            Please download the Form in PDFPDF format.

        • PRU PIB2 PRU PIB2 Islamic Business — Balance Sheet

          Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 1 — Detail of Non-Trading Book Self-Financed Assets

            Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 2 — Detail of Non-Trading Book Assets Financed by Unrestricted PSIAs

            Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 3 — Detail of Non-Trading Book Assets Financed by Restricted PSIAs

            Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 4 — Detail of Non Market Risk in the Trading Book — Self-Financed

            Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 5 — Detail of Non Market Risk in the Trading Book — PSIAU Financed

            Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 6 — Detail of Non Market Risk in the Trading Book — PSIAR Financed

            Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 7 — Detail of Market Risk in the Trading Book

            Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 8 — Islamic — Calculation of DCR

            Please download the Form in PDFPDF format.

          • PRU PIB2 Appendix 9 — Analysis of Reserves Movement

            Please download the Form in PDFPDF format.

        • PRU PIB3 Profit and Loss Statement

          Please download the Form in PDFPDF format.

        • PRU PIB4 Profit and Loss Statement for Islamic Financial Institutions

          Please download the Form in PDFPDF format.

        • PRU PIB5 Expenditure Based Capital Minimum — Solo

          Please download the Form in PDFPDF format.

        • PRU PIB6 Capital Adequacy Calculation — Solo

          Please download the Form in PDFPDF format.

        • PRU PIB7 PRU PIB7 Large Exposures

          Please download the Form in PDFPDF format.

          • PRU PIB7 Appendix 1 — Detail of Largest 25 Exposures by Contract Type

            Please download the Form in PDFPDF format.

        • PRU PIB8 Liquidity Schedule — Maturity Mismatch

          Please download the Form in PDFPDF format.

        • PRU PIB9 PRU PIB9 Branch Return

          Please download the Form in PDFPDF format.

          • PRU PIB9 Appendix 1 Largest Exposures Undertaken Out of the Branch

            Please download the Form in PDFPDF format.

        • PRU PIB10 Declaration by Authorised Firm

          Please download the Form in PDFPDF format.

        • PRU PIB12 Geographical Distribution of Assets and Liabilities

          Please download the Form in PDFPDF format.

          [Added] DFSA GM4/2007 (Made 13th September 2007). [VER4/09-07]

        • PRU PIB13 Provisions for Impairment

          Please download the Form in PDFPDF format.

          [Added] DFSA GM4/2007 (Made 13th September 2007). [VER4/09-07]

        • PRU PIB14 Exposures in Arrears

          Please download the Form in PDFPDF format.

          [Added] DFSA GM4/2007 (Made 13th September 2007). [VER4/09-07]

        • PRU PIB100 PRU PIB100 Statement of Financial Group Capital Adequacy

          Please download the Form in PDFPDF format.

          [Added] DFSA GM3/2007 (Made 5th July 2007). [VER15/07-07]

          • PRU PIB100 App1 Continuation Sheet

            Please download the Form in PDFPDF format.

            [Added] DFSA GM3/2007 (Made 5 July 2007). [VER15/07-07]

      • PRU 2.2 PRU 2.2 PIB Instructional Guidelines

        Please download the guidelines in PDFPDF format.

        • PRU 2.2.1 Guidance for form PIB1 — Balance Sheet (Conventional Authorised Firms)

          Instructional Guidelines

          Item No. Item Guidance
          1.1.1 Cash and Balances with Central Banks Include, for example, the following amounts:
          •   Notes and coins;
          •   Long positions in Gold bullion (including Tola Bars);
          •   Amounts placed with central banks including funds required to be placed on deposit with central banks and monetary authorities.
          1.1.2 Treasury bills and other eligible bills Treasury bills issued by the national governments or by the Central banks on behalf of the governments. Also include bills issued by other entities, which are eligible for rediscounting with the central bank.
          1.1.3 Money market placements Include deposits at call and other money market placements with banks or other money market participants
          1.2.1 Trading securities Include investments acquired principally for the purpose of selling or repurchasing them in the near term for short-term-profit-taking. This would include but not limited to, debt, equity and hybrid instruments
          1.2.2 Derivative financial instruments Include, but are not limited to, positions representing the following instruments, recorded at fair value:

          Forward and Futures contracts in Currencies, Interest rates and other financial assets
          Forward rate agreements
          Currency and interest rate swaps
          Credit derivatives
          Option contracts on currency, interest rate and other financial assets.

          These derivatives include both the exchange-traded and over-the-counter versions.
          1.2.3 Other financial instruments at fair value through profit and loss Include all financial instruments which are, upon initial recognition, designated by the entity as financial assets to be measured at fair value through profit or loss other than the trading securities included in 1.2.1.
          1.2.4 Investment securities — available for sale Include non-derivative financial assets that are designated as available for sale by the firm or that have not been classified under any of the other categories of investment in section 1.2.
          1.2.5 Investment securities - held to maturity Include non-derivative financial assets with fixed or determinable payments and fixed maturity that the firm has positive intention and ability to hold to maturity.
          1.2.6 Investments in associated undertakings Include investments in entities, including unincorporated entities such as partnerships, over which the firm has significant influence and where the entity in question is neither a subsidiary nor a joint venture operation
          1.3 Loans and advances Amounts arising from, for example:
          •   Revolving credit facilities;
          •   Credit cards outstanding balances;
          •   Housing loans (both variable and fixed rates);
          •   Term loans (both variable and fixed rates);
          •   The book value of assets leased out under finance lease agreements;
          •   Loans made under conditional hire purchase contracts;
          •   Advances purchased by or assigned to the reporting institutions, factoring or similar arrangements
          •   Other loans and advances.

          The amounts reported should be gross of provisions (as specific and general provisions should be reported in the Liabilities section of the balance sheet) and net of interest receivable.
          1.4.1 Murabaha and Istina'a receivables Report here all receivables relating to Murabaha and Istisna'a contracts. Refer to FAS 2 and FAS 10 of AAOIFI respectively.
          1.4.2 Ijarah assets and receivables Include Ijarah assets net of depreciation/ amortisation and Ijarah receivables. Refer to FAS 8 of AAOIFI.
          1.4.3 Mudaraba Financing Capital provided on a Mudaraba basis should be reported here. Refer to FAS 3 of AAOIFI.
          1.4.4 Musharaka Financing Report capital provided on a Musharaka basis. Refer to FAS 4 of AAOIFI. Investment in the share capital of another company should be reported under "Other", Form PIB 1, Item No. 1.4.5.
          1.4.5 Other investments Include any other investments undertaken through Islamic contracts, including Parallel Istisna'a assets (refer FAS 10 of AAOIFI) and capital provided on Salam contracts (refer FAS 7 AAOIFI).
          1.5 Fixed assets Include, for example, the value of the following:
          •   Plant and equipment, the residual value of items leased out under an operating lease (excluding balances relating to named Ijarah assets which should be included separately in Form PIB 1, Item No. 1.4.2);
          •   Own premises being occupied or developed for occupation by the Authorised Firm, property (excluding property acquired / held available for sale which should be included in "Other Assets", Form PIB 1, Item No. 1.7).

          The amounts reported here should be net of accumulated depreciation and amortisation.
          1.6.1 Goodwill Include amounts relating to any purchased goodwill.
          1.6.2 Other intangible assets Items to be included:
          •   Capitalised development costs
          •   Brand names, trademarks and similar rights
          •   Licences and exchange seats which may be held as part of the Authorised Firm's trading requirement.
          1.7 Other assets Assets that have not been included in any of the items above. In particular, positions in short term securities held with the intention of resale, sundry debtors, prepayments and accrued income not identified elsewhere.
          1.9.1 Direct credit substitutes These relate to the financial requirements of counterparty where the risk of loss to the Authorised Firm on the transaction is equivalent to a direct claim on the counterparty. Include here
          •   Guarantees of a financial nature to stand behind the current obligations of customers (e.g. loan guarantees);
          •   Guarantees of leasing operations;
          •   Letters of Credit and Stand-by Letters of Credit to the extent that they do not qualify for inclusion in Item No. 1.9.3 "Trade related contingents" below;
          •   Guarantees of a capital nature such as undertakings given to a non bank financial company which are considered as capital by the appropriate regulatory body. Guarantees given to a company not connected to the reporting institution should be risk weighted at 100% and those for connected companies should be deducted from the reporting institution's capital base.
          •   Acceptances granted and risk participation in bankers' acceptances. Where the reporting institution's own acceptances have been discounted by that institution the nominal value of the bills held should be deducted from the nominal amount of the bills issued under the facility and a corresponding on balance sheet entry made.
          1.9.2 Transaction related contingents These exposures relate to the on-going trading activities of a counterparty where the risk of loss to the reporting institution depends on the likelihood of a future event which is independent of the creditworthiness of the counterparty. They are essentially guarantees that support particular non financial obligations rather than a customer's financial obligations. Include here:
          •   Advance payment guarantees
          •   Performance bonds including bid or tender bonds, warranties and indemnities (indemnities given for lost share certificates or bills of lading and guarantees of the validity of papers rather than of payment under certain conditions should be reported here);
          •   Stand by Letters of Credit relating to a particular contract or to non financial transactions (including arrangements backing, inter alia, subcontractors' and supplier's performance, labour and materials, contracts and construction bids).
          1.9.3 Trade related contingents Report short term self-liquidating trade related items such as documentary letters of credit issued by the reporting institution that are collateralised by the underlying shipment i.e. the credit provides for the reporting institution to retain title to the underlying shipment. L/C's issued without provision for the reporting institution to retain title to the underlying shipment should be reported under direct credit substitutes above.
          1.9.4 Sale and Repurchase Agreements Only report here sale and repurchase agreements where the asset sold is not reported on the balance sheet. Where the asset is off balance sheet, the appropriate counterparty weighting is determined by the issuer of the security and not according to the counterparty with whom the transaction has been undertaken.
          1.9.5 Forward Assets Purchases The appropriate counterparty weighting should be determined by the asset to be purchased and not the counterparty with whom the contract has been entered into. Include commitments for loans and other on balance sheet items with certain drawdown. Exclude foreign currency spot deposits with value date of up to two working dates after trade date.
          1.9.6 Forward Deposits Placed Relates to agreements between two parties whereby one will pay and the other receive an agreed rate of interest on a deposit to be placed by one with the other at some pre-determined rate in the future. The weight should be determined according to the counterparty with whom the deposit will be placed. Exclude foreign currency spot deposits with value date of up to two working dates after trade date.
          1.9.7 Uncalled partly-paid shares and securities Only include here if there is a specific date for a call. If there is no specific date for a call, the item should be included as a long term commitment under PIB 1 Item No. 1.9.10, "Other Commitments".
          1.9.8 NIF's and RUF's Note issuance and revolving underwriting facilities should include the reporting institutions underwriting obligations of any maturity. Where the facility has been drawn down by the borrower and the notes are held by someone other than the Authorised Firm, the underwriting obligation should continue to be reported at the nominal amount.
          1.9.9 Endorsement of Bills These should be reported at the full nominal amount, less any amount for bills which the institution now holds but had previously endorsed. Endorsement of bills not accepted by banks will attract the counterparty risk weighting of the issuer. If it has been endorsed by another bank, a reduced risk weighting applies.
          1.9.10 Other Commitments All other undrawn commitments are reportable here, divided into commitments under and over one year.
          1.9.11 Assets funded by restricted PSIAs The methodology for calculating exposures financed by PSIAs are, in principle, no different to calculating exposures for a reporting institution's self financed assets. All the guidance notes above apply in their entirety unless stated otherwise.
          1.10 Deposits Separately identify deposits due to the financial institutions in PIB 1 Item No. 1.10.1. All other deposits are to be reported in the other deposit section, PIB 1 Item No. 1.10.2.
          1.11 Tax Liability Report all items accrued and payable in respect of the Authorised Firm's current and future tax liabilities.
          1.12 Provisions All specific and general provisions in respect of Loans and Advances and other receivables should be reported here. Exclude provisions against Islamic contracts which should be reported in PIB 1 Item No. 1.14.4 below.
          1.13 Loan Capital and Hybrid Securities Report items such as subordinated loans drawn down by the Authorised Firm.
          1.14 Liabilities arising from Islamic contracts Liabilities arising from Islamic contracts include advances received against Salam contracts (defined in Para 3 and 19 of FAS 7 issued by AAOIFI and Ijarah investment payables (refer to FAS 8 of AAOIFI). Report any provisions against Islamic contracts in item Form PIB 1, Item No. 1.14.4.
          1.15.1 Creditors and other liabilities Report all items not included in any of the above, such as proposed dividends payable, sundry accruals and deferred income etc.
          1.15.2 Derivative financial instruments and other trading liabilities Include, but are not limited to, liabilities arising out of positions representing the following instruments, recorded at fair value:

          Forward and Futures contracts in Currencies, Interest rates and other financial assets
          Forward rate agreements
          Currency and interest rate swaps
          Credit derivatives
          Option contracts on currency, interest rate and other financial assets.

          These derivatives include both the exchange-traded and over-the-counter versions.
          1.17.1 Liabilities relating to Restricted PSIA Enter here the aggregate liabilities arising from the assets of restricted PSIA investment funds.
          1.17.2 Other Enter the aggregate of all other off balance sheet liabilities here
          1.18.1 Ordinary Shares Include in respect of this item the amount of ordinary share capital issued, reported at nominal paid up value. Do not report the unpaid element of partly paid shares or authorised but unissued share capital. Authorised Firms should exclude holdings in their own shares.
          1.18.2 Preference Shares Fixed dividend share capital that ranks above ordinary shares in the event of liquidation. Report the value of the preference shares issued.
          1.18.3 Partnership Capital and other Include here other types of equity which have the same properties of permanent share capital. This could include partnership capital accounts, capital items for unincorporated associations etc.
          1.20 Share premium account Any amounts received by the authorised institution in excess of the nominal paid up value.
          1.21.1 Asset revaluation reserve Enter amounts arising from the revaluation of assets for which it has been necessary to set up this reserve.
          1.21.2 Goodwill and other reserves Enter amounts arising from purchased goodwill or other situations for which it has been necessary to set up this or any other reserve.
          1.21.3 Investment Risk Reserve Prudential category 5 Authorised Firms should include in respect of this item the amount that is appropriated out of the income of investment account holders, after allocating the Mudarib share, in order to meet future losses attributable to investment account holders. Refer also to FAS 11 of AAOIFI.
          1.21.4 Profit Equalisation Reserve Prudential category 5 Authorised Firms should include in respect of this item the amount appropriated out of the Mudaraba income, before allocating the Mudarib share, in order to maintain a certain level of investment returns for investment account holders and to increase owners' equity. Refer also to FAS 11 of AAOIFI.
          1.22 Total Reserves Sum of PIB 1 Item Nos. 1.21.1 + 1.21.2 + 1.21.3 + 1.21.4.
          1.24 Minority Interests Report amounts attributable to minority shareholders from the overall equity figure.
          1.25 Total shareholders' equity Sum of PIB 1 Item Nos. 1.19 + 1.20 + 1.22 - 1.24.
          1.26 Total liabilities and shareholders' equity Sum of PIB 1 Item Nos. 1.16 + 1.25
          1.27 Client Money held or controlled by the Authorised Firm Total of all Client Money, as per COB 9.3, as at the reporting date.
          1.27.1 of which, belonging to Segregated Clients Subset of Item No. 1.27 above.
          The term Segregated Client is defined in COB A5.2.1(2).
          1.28 Total Client Money held in Client Accounts Total of all Client Money held in Client Accounts as at the reporting date.
          The term Client Account is defined in COB A5.4.1.
          1.29 Insurance Monies held or controlled by the Authorised Firm Total of all Insurance Monies, as per COB 14.2, as at the reporting date.
          1.29.1 Of which, segregated Subset of Item No. 1.29 above.
          Insurance Monies segregation is detailed in COB 14.3. Segregated Insurance Monies is the total of all Insurance Monies less that amount affected by COB 14.3.12.
          1.30 Total Insurance Monies held in Insurance Bank Accounts Total balance of all Insurance Monies held in Insurance Bank Accounts as at the reporting date. The term Insurance Bank Account is explained in COB 14.3.

        • PRU 2.2.2 Guidance for Form PIB 1 — Appendix 1 — Detail of risk weighted assets

          Instructional Guidelines

          Authorised Firms are referred to PIB Chapter 4 and PIB Appendix 4 to understand the background to risk weighting assets in the non trading book. In particular, PIB Section A4.3 contains detailed requirements in respect on weighting exposures in the appropriate risk buckets. If an Authorised Firm is uncertain as to where to classify a particular exposure, it should contact DFSA to obtain this clarity. Particular care should be taken for exposures classified in anything other than the 100% risk weighting category.

          Among other things, risk weightings may be reduced on non trading book items by obtaining a guarantee from a third party or a party connected to the Authorised Firm (the "guarantor"). Provided the conditions laid out in Rules PIB A4.3.1 to PIB A4.3.4 are met, the Authorised Firm may opt to use the counterparty weighting of the guarantor where this risk weighting is less than that for the underlying counterparty.

          Item No. Item Guidance
          1.A1.2.3 Mortgage backed securities Investments in mortgage backed securities only attract a 50% rating provided the conditions set out in PIB Rule A4.3.6 are met in its entirety.
          1.A1.4 Assets arising from Islamic contracts In respect of counterparty weightings for exposures in the non trading books, Authorised Firms are referred Rules PIB 3.5.1 to PIB 3.5.5. In particular, attention is drawn to the weightings referred to in table 2 by Islamic contract type. Authorised Firms are reminded that in the event of any doubt in this area, they should contact the DFSA for clarification.
          1.A1.4.5 Other investments Include all other investments arising from Islamic contracts not referred to above.
          1.A1.9 Off balance sheet items Details of Credit Conversion Factors are set out in Rules PIB A4.3.10 to PIB A4.3.14. Authorised Firms are reminded to be cautious in capturing off balance sheet exposures and to refer any matters of uncertainty to DFSA for greater clarification.
          1.A1.9.4 Sale and Repurchase Agreements Attention is drawn to Rules PIB A4.3.15 to PIB A4.3.17 which note that the counterparty weight of a repo agreement is by reference to the issuer of the asset subject to the agreement and not to the counterparty to the repurchase agreement. The weight on a reverse repo is determined as if it were a collateralised loan to a counterparty
          1.A1.9.10 Other commitments Authorised Firms are referred to the detail of Rules PIB A4.4.1 to PIB A4.4.7 in respect of determining the maturity of commitments where they have been renegotiated or are linked commitments.
          1.A1.11 OTC derivative contracts The calculation of the Credit Equivalent Amount is set out in PIB Rule A4.5.12. Authorised Firms are referred to the table in PIB Rule A4.5.14 which sets out the calculation of Potential Future Credit Exposures with details of how to net them set out in PIB Rule A4.9.1.
          1.A.12 CRCOM CRCOM is derived by multiplying the sum of risk weighted assets from the non trading book and exposures arising from OTC derivative contracts in the same book by 8%. The number here is transferred to Form PIB 6, Item No. 6.23.

        • PRU 2.2.3 Guidance for Form PIB 1 — Appendix 2 — Non-market risk in the Trading Book

          Instructional Guidelines

          The details for calculating the exposures on these risks is set out in PIB Section A4.5 which is the Appendix relating to Credit Risk.

          Item No. Item Guidance
          1.A2.2 OTC derivatives For OTC derivatives, attention is drawn to PIB Rule A4.5.3 which states that the maximum weighting is limited to 50%.
          1.A2.3 Repos and Reverse Repos For the counterparty weights on Repos and Reverse Repos, attention is drawn to the Instruction Guidance relating to Form PIB 1, Item No. 1.9.4.
          1.A2.4 Total counterparty risk requirement for non market risk in the trading book The total counterparty risk requirement for non market risk in the trading book ("CPCOM") is the sum of the capital charges arising from Delivery Versus Payment transactions, Free Deliveries, OTC Derivatives, Repos, Reverse Repos and Deferred Settlement Transactions. The figure here should be transferred to Form PIB 6, Item No. 6.32.

        • PRU 2.2.4 Guidance for Form PIB 1 — Appendix 3 — Market Risk in the Trading Book

          Instructional Guidelines

          DFSA acknowledges that even for Authorised Firms with relatively straightforward exposures on the trading books, the underlying calculations for various market risks can be detailed and complex. DFSA requires only the summary numbers to be reported but expects Authorised Firms to maintain detailed audit trails that substantiate the risk requirements. Authorised Firms are also reminded that they should make this information available for review as and when required.

          In the event of any uncertainty, Authorised Firms are advised to contact their supervisor for clarity. Authorised Firms are asked to review the material set out PIB Appendix 5 with care given the multiplicity of methods that can be used to calculate the capital requirement on interest rate risk, equity risk, FX risk, Commodities risk Options Risk and Securities Underwriting Risk.

          Where Authorised Firms intend to use internally developed market risk models for the purposes of valuing positions and calculating capital requirements, particular attention is drawn to PIB Section A5.8 and the qualitative criteria.

          Item No. Item Guidance
          1.A3.1.4,
          1.A3.2.4,
          1.A3.4.4
          1.A3.5.4
          1.A3.6
          Various risk requirements An Authorised Firm's total trading book capital requirement is as defined in PIB Rule 2.8.3. With the exception of the foreign exchange risk requirement, the total risk requirements as calculated for interest rate, equity, Commodities, Options and Securities Underwriting transactions are to be transferred to Form PIB 6 under the section titled Trading Book Capital requirement (Item Nos. 6.33–6.37).
          1.A3.3 Foreign exchange risk requirement The Foreign Exchange risk capital requirement is included in the Form PIB 6 under the Non Trading Book Capital requirement and should be transferred to Item No. 6.24 (PIB Rule 2.8.3 refers).
          1.A3.10 Total trading book capital requirement The total Trading Book Capital requirement here should be transferred to the Form PIB 6, Item No. 6.38.

        • PRU 2.2.5 Guidance for Form PIB 1 — Appendix 4 — Calculation of the DCR

          Instructional Guidelines

          DCR is defined in PIB Section 3.4 and is calculated only in respect of the PSIA funded assets. Whilst the end calculation is relatively straightforward, DFSA acknowledges that the details required to derive the final figure will be extensive depending on the size of the PSIA funded asset base.

          For Authorised Firms providing services through Islamic Windows, DFSA has not asked Authorised Firms to identify in detail the credit and market risks arising from positions in both the trading and non trading book and on and off balance sheet. Instead, Authorised Firms are required to report the numbers in summary form and are reminded that they must make the information available for review as and when required.

          Item No. Item Guidance
          1.A.4.1.1
          1.A.4.1.2
          CPCOM
          CRCOM
          CPCOM and CRCOM are calculated in accordance with Sections PIB 4.3 and PIB 4.4. The risk weightings of the assets in Islamic contracts are derived from PIB Section 3.5 and for all other assets via the appropriate Rules primarily in PIB Chapter 4 and PIB Appendix 4. Refer to previous guidance on Form PIB 1, Appendices 1 and 2 which will be relevant here.
          1.A.4.1.3 Total
          PSIACOM
          Credit
          Total PSIACOM Credit is the sum of CPCOM and CRCOM for PSIA assets.
          1.A.4.2 PSIACOM
          Market
          PSIACOM Market is the sum of the capital charge for the various kinds of market risks arising in the trading book for PSIA assets. Market risks are calculated primarily with reference to PIB Chapter 5 and PIB Appendix 5.
          1.A.4.3 DCR
          calculation
          The number derived for the DCR charge should be carried over to Form PIB 6, Item Nos. 6.28.

        • PRU 2.2.6 Guidance for Form PIB 2 — Balance Sheet — Islamic Financial Institutions

          Instructional Guidelines

          There are effectively three sets of returns for Category 5 institutions. Wherever appropriate, all balance sheet captions need to identify separately if they have arisen from self financed business (including finance from Amanah and demand deposits), from the business provided by utilising the unrestricted assets of PSIA asset providers and from the restricted PSIA business. Whilst AAOIFI permits unrestricted PSIA assets to be commingled with self financed assets for balance sheet reporting purposes, the need to maintain separate records for each asset class is paramount. Restricted PSIA assets and liabilities cannot be commingled with the former and should be reported off balance sheet.

          In the event of any uncertainty, Authorised Firms are required to consult with DFSA to obtain the necessary clarity.

          Item No. Item Guidance
          2.1 Cash and Liquid Assets Include, for example, the following amounts:
          •   Notes and coins;
          •   Deposits at call;
          •   Long positions in Gold bullion (including Tola Bars);
          •   Amounts placed with central banks and other financial institutions including funds required to be placed on deposit with central banks and monetary authorities.
          2.2 Investment Securities Report long term investment securities not held with intent to trade (short term securities are reported in "Other Assets", Item No 2.7 below). Include, for example:
          •   Debt and equity issues by central banks and other financial institutions (Eurobonds, FRNs, Mortgage Backed securities, equity holdings, Sukuks etc.);
          •   Investments in subsidiaries and associated companies;
          •   Investments in the capital of other banks and financial institutions;
          •   Holdings in non financial firms of which the Authorised Firm is a controller (i.e. "Qualifying Holdings").

          Exclude any investments in certain named Islamic contracts which are included below (PIB 2 Item Nos. 2.4.1 to 2.4.7).
          2.3 Loans and Advances Amounts arising from, for example:
          •   Revolving credit facilities;
          •   Credit cards outstanding balances;
          •   Housing loans (both variable and fixed rates);
          •   Term loans (both variable and fixed rates);
          •   The book value of assets leased out under finance lease agreements;
          •   Loans made under conditional hire purchase contracts;
          •   Advances purchased by or assigned to the reporting institutions, factoring or similar arrangements
          •   Other loans and advances.

          The amounts reported should be gross of provisions (as specific and general provisions should be reported in the Liabilities section of the balance Sheet) and net of interest receivable.
          2.4.1 Murabaha and Istisna'a Receivables Report here all receivables relating to Murabaha and Istisna'a contracts. Refer to FAS 2 and FAS 10 of AAOIFI respectively.
          2.4.2 Ijarah assets Include Ijarah assets net of depreciation/ amortisation and Ijarah receivables. Refer to FAS 8 of AAOFI.
          2.4.3 Mudaraba Financing Capital provided on a Mudaraba basis should be reported here. Refer also to FAS 3 of AAOIFI.
          2.4.4 Musharaka Financing Report capital provided on a Musharaka basis. Refer to FAS 4 of AAOIFI. Investment in the Share capital of another company should be reported under "Other", Form PIB 2, Item No. 2.4.7.
          2.4.5 Salam Capital provided on Salam contract should be reported here. Refer to FAS 7 of AAOIFI.
          2.4.6 Parallel Istisna'a Parallel Istisna'a receivables/assets should be reported here. Refer to FAS 10 of AAOFI.
          2.5 Fixed Assets Include, for example, the value of the following:
          •   Plant and equipment, the residual value of items leased out under an operating lease (excluding balances relating to named Ijarah assets which should be included separately in Form PIB 2, Item No. 2.4.2);
          •   Own premises being occupied or developed for occupation by the authorised institution, property (excluding property acquired / held available for sale which should be included in "Other Assets" in Form PIB 2, Item No. 2.7).

          The amounts reported here should be net of accumulated depreciation and amortisation.
          2.6.1 Goodwill Include amounts relating to any purchased goodwill.
          2.6.2 Other intangibles Items to be included:
          •   Capitalised development costs;
          •   Brand names, trademarks and similar rights;
          •   Licences and exchange seats which may be held as part of the Authorised Firm's trading requirement
          2.7 Other Assets Assets that have not been included in any of the items above. In particular, positions in short term securities held with the intention of resale, sundry debtors, prepayments and accrued income not identified elsewhere.
          2.9.1 Direct Credit Substitutes These relate to the financial requirements of a counterparty where the risk of loss to the reporting institution on the transaction is equivalent to a direct claim on the counterparty. Essentially the risk of loss depends on the creditworthiness of the counterparty. Include here:
          •   Guarantees of a financial nature to stand behind the current obligations of customers (e.g. loan guarantees);
          •   Guarantees of leasing operations;
          •   Letters of Credit and Stand-by Letters of Credit to the extent that they do not qualify for inclusion in Item No. 2.9.3 "Trade related contingents" below;
          •   Guarantees of a capital nature such as undertakings given to a non bank financial company which are considered as capital by the appropriate regulatory body. Guarantees given to a company not connected to the reporting institution should be risk weighted at 100% and those for connected companies should be deducted from the reporting institution's capital base.
          •   Acceptances granted and risk participation in bankers' acceptances. Where the reporting institution's own acceptances have been discounted by that institution the nominal value of the bills held should be deducted from the nominal amount of the bills issued under the facility and a corresponding on balance sheet entry made.
          2.9.2 Transaction related Contingents These exposures relate to the on-going trading activities of a counterparty where the risk of loss to the reporting institution depends on the likelihood of a future event which is independent of the creditworthiness of the counterparty. They are essentially guarantees that support particular non financial obligations rather than a customer's financial obligations. Include here:
          •   Advance payment guarantees
          •   Performance bonds including bid or tender bonds, warranties and indemnities (indemnities given for lost share certificates or bills of lading and guarantees of the validity of papers rather than of payment under certain conditions should be reported here);
          •   Stand-by Letters of Credit relating to a particular contract or to non financial transactions (including arrangements backing, inter alia, subcontractors' and supplier's performance, labour and materials, contracts and construction bids).
          2.9.3 Trade related Contingents Report short term self liquidating trade related items such as documentary letters of credit issued by the reporting institution which are to be collateralised by the underlying shipment i.e. the credit provides for the reporting institution to retain title to the underlying shipment. L/C's issued without provision for the reporting institution to retain title to the underlying shipment should be reported under direct credit substitutes above.
          2.9.4 Sale and Repurchase Agreements Only report here sale and repurchase agreements where the asset sold is not reported on the balance sheet. If it is reported on the balance sheet, it should not be reported here but in the relevant on balance sheet section of the return. Where the asset is off balance sheet, the appropriate counterparty weighting is to be determined by the issuer of the security and not according to the counterparty with whom the transaction has been entered into.
          2.9.5 Forward Assets Purchases The appropriate counterparty weighting should be determined by the asset to be purchased and not the counterparty with whom the contract has been entered into. Include commitments for loans and other on balance sheet items with certain drawdown. Exclude foreign currency spot deposits with value date of up to two working dates after trade date.
          2.9.6 Forward Deposits Placed Relates to agreements between two parties whereby one will pay and the other receive an agreed rate of interest on a deposit to be placed by one with the other at some pre determined rate in the future. The weight should be determined according to the counterparty with whom the deposit will be placed. Exclude foreign currency spot deposits with value date of up to two working dates after trade date.
          2.9.7 Uncalled partly-paid shares and securities Only include if there is a specific date for a call. If there is no specific date for a call, the item should be included as a long term commitment under PIB 2 Item No. 2.9.10 "Other Commitments".
          2.9.8 NIF's and RUF's Note issuance and revolving underwriting facilities should include the reporting institutions underwriting obligations of any maturity. Where the facility has been drawn down by the borrower and the notes are held by someone other than the Authorised Firm, the underwriting obligation should continue to be reported at the nominal amount.
          2.9.9 Endorsement of Bills These should be reported at the full nominal amount, less any amount for bills which the institution now holds but had previously endorsed. Endorsement of bills not accepted by banks will attract the counterparty risk weighting of the issuer. If it has been endorsed by another bank, a reduced risk weighting applies.
          2.9.10 Other Commitments All other undrawn commitments are reportable here, divided into commitments under and over one year.
          2.9.11 OTC Derivative Contracts Counterparty risk arising in both the non-trading and trading books should be calculated with reference to the Rules in PIB Section A4.5. Amounts to be reported here are the replacement costs/ NPV of such contracts
          2.10 to 2.18.11 Assets financed by PSIAR The methodology for calculating exposures financed by PSIA assets are, in principle, no different to calculating exposures for a reporting institution's self financed assets. All the guidance notes above apply in their entirety unless stated otherwise.
          2.20 Deposits Separately identify deposits due to clearing houses in PIB 2 Item No. 2.20.1 and other financial institutions in PIB 2 Item No. 2.20.2. All other deposits are to be reported in PIB 2 Item No. 2.20.3, "Other".
          2.21 Tax Liability Report all items accrued and payable in respect of the institution's current and future tax liabilities.
          2.22 Provisions All specific and general provisions in respect of Loans and Advances and other receivables should be reported here.
          2.23.1 and 2.23.2 Liabilities arising from Islamic activities Include advances received against Parallel Salam contracts (defined in Para 3 and 19 of FAS 7 issued by AAOIFI and Ijarah investment payables (refer to FAS 8 of AAOIFI).
          2.23.3 Liabilities relating to PSIAu Enter here the aggregate of all liabilities incurred on behalf of and amounts owed to PSIAu.
          2.23.4 Other Enter all other liabilities incurred in respect of Islamic contracts.
          2.24 Creditors and other Liabilities Report all items not included in any of the above, such as proposed dividends payable, sundry accruals and deferred income etc.
          2.26.1 Liabilities relating to PSIAR Enter here the aggregate liabilities arising from the restricted assets of PSIAR.
          2.26.2 Other Enter the aggregate of all other off-balance sheet liabilities here.
          2.27.1 Ordinary Shares Include the amount of ordinary share capital issued, reported at nominal paid up value. Do not report the unpaid element of partly paid shares or authorised but unissued share capital. Authorised Firms must exclude holdings in their own shares.
          2.27.2 Preference Shares Fixed dividend share capital that ranks above ordinary shares in the event of liquidation. Report the value of the preference shares issued.
          2.27.3 Partnership Capital and other Include here other types of equity which have the same properties of permanent share capital. This could include partnership capital accounts, capital items for unincorporated associations etc.
          2.29 Share premium Account Any amounts received by the authorised institution in excess of the nominal paid up value.
          2.30.1 Asset revaluation reserve Enter amounts arising from the revaluation of assets for which it has been necessary to set up this reserve.
          2.30.2 Investment Risk Reserve Category 5 Authorised Firms should include in respect of this item the amount that is appropriated out of the income of investment account holders, after allocating the Mudarib share, in order to meet future losses attributable to investment account holders. Refer also to FAS 11 of AAOIFI.
          2.30.3 Profit Equalisation reserve Category 5 Authorised Firms should include in respect of this item the amount appropriated out of the Mudaraba income, before allocating the Mudarib share, in order to maintain a certain level of investment returns for investment account holders and to increase owners' equity. Refer also to FAS 11 of AAOIFI.
          2.30.4 Goodwill and other Enter amounts arising from purchased goodwill or other situations for which it has been necessary to set up a goodwill or other reserve.
          2.31 Total Reserves Sum of Item Nos. [2.30.1 + 2.30.2 + 2.30.3 + 2.30.4] above.
          2.33 Minority Interests Report amounts attributable to minority shareholders from the overall equity figure.
          2.34 Total shareholders' equity Sum of PIB 2 Item Nos. 2.28 + 2.29 + 2.31 - 2.33.
          2.35 Total liabilities and shareholders' equity Sum of PIB 2 Item Nos. 2.25 + 2.34.

        • PRU 2.2.7 Guidance for Form PIB 2 — Appendix 1 — Detail of Non-Trading Book Assets (self-financed)

          Instructional Guidelines

          Authorised Firms are referred to PIB Chapter 4 and PIB Appendix 4 to understand the background to risk weighting assets in the non trading book. In particular, PIB Section A4.3 contains detailed requirements in respect of weighting exposures in the appropriate risk buckets. If an Authorised Firm is uncertain as to where to classify a particular exposure, it should contact DFSA to obtain this clarity. Particular care should be taken for exposures classified in anything other than the 100% risk weight category.

          Amongst other things, risk weightings may be reduced on non trading book items by obtaining a guarantee from a third party or a party connected to the Authorised Firm (the "guarantor"). Provided the conditions laid out in PIB A4.3.1 to PIB A4.3.4 are met, the Authorised Firm may opt to use the counterparty weighting of the guarantor where this risk weighting is less than that for the underlying counterparty.

          Only enter exposures relating to self financed assets in PIB 2 Appendix 1.

          Item No. Item Guidance
          2.A1.2.3 Mortgage backed securities Investments in mortgage backed securities only attract a 50% rating provided the conditions set out in PIB Rule A4.3.6 are met in their entirety.
          2.A1.4 Assets arising from Islamic contracts In respect of counterparty weightings for exposures in the non trading books, Authorised Firms are referred Rules PIB 3.5.1 to PIB 3.5.5. In particular, attention is drawn to the weightings referred to in table 2 by Islamic contract type. Authorised Firms are especially reminded that in the event of any doubt in this area, they should contact the DFSA for clarification.
          2.A1.4.7 Other Include all other investments arising from Islamic contracts not referred to above.
          2.A1.9 Off balance sheet items Details of Credit Conversion Factors are set out in Rules PIB A4.3.10 to PIB A4.3.14. Authorised Firms are reminded to be cautious in capturing off balance sheet exposures and to refer any matters of uncertainty to DFSA for greater clarification.
          2.A1.9.4 Sale and repurchase agreements Attention is drawn to Rules PIB A4.3.15 to PIB A4.3.17 which note that the counterparty weight of a repo agreement is by reference to the issuer of the asset subject to the agreement and not to the counterparty to the repurchase agreement. The weight on a reverse repo is determined as if it were a collateralised loan to a counterparty.
          2.A1.9.10 Other commitments Authorised Firms are referred to the detail in Rules PIB A4.4.1 to PIB A4.4.7 in respect of determining the maturity of commitments where they have been renegotiated or are linked commitments.
          2.A1.12 OTC Derivative Contracts The calculation of the Credit Equivalent Amount is set out in PIB Rule A4.5.12. Authorised Firms are referred to the table in PIB A4.5.14 which sets out the calculation of Potential Future Credit Exposures with details of how to net them set out in PIB Rule A4.9.1.
          2.A1.13 CRCOM (self) CRCOM is derived by multiplying the sum of risk weighted assets from the non trading book and exposures arising from OTC derivative contracts in the same book by 8%. The number here is transferred to Form PIB 6, Item No. 6.23.

        • PRU 2.2.8 Guidance for Form PIB 2 — Appendix 2 — Detail of Non-Trading Book Assets (PSIAu)

          Instructional Guidelines

          All the guidance notes in PIB 2 Appendix 1 apply here. Only enter exposures relating to assets of the PSIAu investors.

          Item No. Item Guidance
          2.A2.13 CRCOM (PSIAu) CRCOM is derived by multiplying the sum of risk weighted assets from the non trading book and exposures arising from OTC derivative contracts in the same book by 8%. The number here is transferred to the DCR calculation in Form PIB 2, Appendix 8, Item No. 2.A8.1.2.

        • PRU 2.2.9 Guidance for Form PIB 2 — Appendix 3 — Detail of Non-Trading Book Assets (PSIAR)

          Instructional Guidelines

          All the guidance notes in PIB 2 Appendix 1 apply here. Only enter exposures relating to assets of the PSIAR investors.

          Item No. Item Guidance
          2.A3.13 CRCOM (PSIAR) CRCOM: CRCOM is derived by multiplying the sum of risk weighted assets from the non trading book and exposures arising from OTC derivative contracts in the same book by 8%. The number here is transferred to Form PIB 2, Appendix 8, Item No. 2.A8.1.2 for the DCR calculation.

        • PRU 2.2.10 Guidance for Form PIB 2 — Appendix 4 — Detail of Non-Market Risk in Trading Book (self-financed)

          Instructional Guidelines

          This Appendix relates to calculating the risk weighted capital charge for self financed assets only.

          The details for calculating the exposures on these risks is in fact set out in PIB Section A4.5 which is the Appendix relating to Credit Risk.

          Item No. Item Guidance
          2.A4.2 OTC Derivatives For OTC derivatives, attention is drawn to PIB Rule A4.5.3 which states that the weighting is calculated in accordance with PIB A4.5.3 except that the maximum weighting is limited to 50%.
          2.A4.2.3 and 2.A4.2.4 Repos & reverse repos For the counterparty weights on Repos and Reverse Repos, refer also to the guidance notes relating to Form PIB 2, Item No. 2.9.4.
          2.A4.4 Total capital requirement for non-market risk in the (PSIAu) trading book The total counterparty risk requirement for non market risk in the trading book (also called CPCOM) is the sum of the capital charges arising from Delivery Versus Payment transactions, Free Deliveries, OTC Derivatives, Repos, Reverse Repos and Deferred Settlement Transactions. The figure here should be transferred to Form PIB 6, Item No. 6.32.

        • PRU 2.2.11 Guidance for Form PIB 2 — Appendix 5 — Detail of Non-Market Risk in Trading Book (PSIAu)

          Instructional Guidelines

          All the guidance notes in Form PIB 2, Appendix 4 apply here unless otherwise stated. This Appendix relates to PSIAu assets only

          Item No. Item Guidance
          2.A5.4 Total capital requirement for non-market risk in the (PSIAu) trading book The total CPCOM figure as reported here should be transferred to Form PIB 2, Appendix 8, Item No. 2.A8.1.1.

        • PRU 2.2.12 Guidance for Form PIB 2 — Appendix 6 — Detail of Non-Market Risk in Trading Book (PSIAR)

          Instructional Guidelines

          All the guidance notes in Form PIB 2, Appendix 4 apply here unless otherwise stated. This Appendix relates to PSIAR assets only.

          Item No. Item Guidance
          2.A6.4 Total capital requirement for non-market risk in the (PSIAR) trading book The total CPCOM figure as reported here should be transferred to Form PIB 2, Appendix 8, Item No. 2.A8.1.1.

        • PRU 2.2.13 Guidance for Form PIB 2 — Appendix 7 — Detail of Market Risk in the Trading Book

          Instructional Guidelines

          DFSA acknowledges that even for Authorised Firms with relatively straightforward exposures on the trading books, the underlying calculations for various market risks can be detailed and complex. DFSA requires only the summary numbers to be reported but expects Authorised Firms to maintain detailed audit trails that substantiate the risk requirements and to make this information available for review as and when required.

          In the event of any uncertainty, Authorised Firms are advised to contact their supervisor for clarity. Authorised Firms are asked to review the material set out PIB Appendix 5 with care given the multiplicity of methods that can be used to calculate the capital requirement on interest rate risk, equity risk, FX risk, commodities risk, options risk and securities underwriting risk.

          Where Authorised Firms intend to use internally developed market risk models for the purposes of valuing positions and calculating capital requirements, particular attention is drawn to PIB Section A5.8 and the qualitative criteria.

          Authorised Firms should note that the market risks arising from exposures in respect of self financed, PSIAu and PSIAR assets are required to be entered in this Appendix. Authorised Firms are reminded to take care in transposing totals from this Appendix as they relate to the three different sets of exposures.

          Item No. Item Guidance
          2.A7.1.4
          2.A7.2.4
          2.A7.4.4
          2.A7.5.4
          2.A7.6
          Capital Requirements The total capital requirements for interest rate, equity position risk, Commodities, Options and Securities Underwriting exposures in respect of self financed assets should be transferred to Form PIB 6, Item Nos. 6.33–6.37 respectively. The capital requirements for PSIA funded assets (both unrestricted and restricted), including the Foreign exchange risk requirement should be transferred to Form PIB 2, Appendix 8 for the calculation of the Displaced Commercial Risk Charge.
          2.A7.3 FER capital Requirement The FX risk capital requirement arising from self financed assets should be transferred to Form PIB 6, Item No. 6.24.
          2.A7.10 Total Trading Book Capital Requirement The Total Trading Book Capital Requirement here should be transferred to Form PIB 6, Item No. 6.38 in PIB 6.

        • PRU 2.2.14 Guidance for Form PIB 2 — Appendix 8 — Calculation of the DCR

          Instructional Guidelines

          DCR is defined in PIB Section 3.4. Authorised Firms are referred to that Section to understand why DCR arises and how it is calculated. Authorised Firms are reminded that DCR only applies in respect of PSIA assets for both he restricted and unrestricted categories. This Appendix aggregates totals from the detailed appendices that precede it.

          Item No. Item Guidance
          2.A8.1 PSIACOM Credit PSIACOM Credit comprised CRCOM and CPCOM calculated on PSIA assets.
          2.A8.1.1 CPCOM CPCOM for PSIAu comes from Form PIB 2, Appendix 5, Item No. 2.A5.4 of and for PSIAR from Form PIB 2, Appendix 6, Item No. 2.A6.4.
          2.A8.1.2 CRCOM CRCOM for PSIAu comes from Form PIB 2, Appendix 2, Item No. 2.A2.13 and for PSIAR from Form PIB 2, Appendix 3, Item No. 2.A3.13.
          2.A8.1.3 Total PSIACOM Credit Sum of Item Nos. [2.A8.1.1 + 2.A8.1.2] above.
          2.A8.2 PSIACOM Market The figures for PSIACOM Market are all derived from Form PIB 2, Appendix 7.
          2.A8.3 Calculation of DCR DCR represents (PSIACOM Credit +PSIACOM Market) * 35%. This figure should be transferred to Form PIB 6, Item No. 6.25.

        • PRU 2.2.15 Guidance for Form PIB 2 — Appendix 9 — Detail of changes in Reserves

          Instructional Guidelines

          Item No. Item Guidance
          2.A9.1 Capital invested Report here the total amount of capital invested by unrestricted PSIA account holders (on balance sheet) gross of provisions. Report similar amounts relating to funds provided by restricted PSIA account holders (off balance sheet).
          2.A9.2 Net asset value Report here the net amount after provisions.
          2.A9.3 Percentage for profit equalisation reserve Report the percentage used for allocation to the profit equalisation reserves.
          2.A9.4 Amount of profit equalisation reserve This represents the amount after the net asset value has been multiplied by the percentage of the profit equalisation reserve. Refer to FAS 11 of AAOIFI.
          2.A9.5 Mudarib fee Enter the Mudarib fee which the authorised institution is entitled to receive for undertaking the investment of the funds provided by the PSIA holders. The fee is agreed by the investment account holders and the bank before the implementation of any contract. In case of a loss, the bank is not entitled to any Mudarib fee and the loss is borne by the investment account holders. Refer to FAS 3 of AAOIFI.
          2.A9.6 Net amount after Mudarib fee Enter here the balance after the amount of profit equalisation reserve and the Mudarib fee has been deducted from the net asset value.
          2.A9.7 Percentage of investment risk reserve Enter here the percentage of the investment risk reserve applicable to the net amount after the mudarib fee.
          2.A9.8 Amount of investment risk reserve Enter the amount of the reserve being the product of the balance in Item No. 2.A9.6 multiplied by the percentage in Item No. 2.A9.7 above. Refer to FAS 11 of AAOIFI.
          2.A9.9 Amount attributed to PSIAs This amount is the residual amount allocated to the PSIA account holders after the deduction of the amounts for the profit equalisation reserve, mudarib fee and investment risk reserves.

        • PRU 2.2.16 Guidance for Form PIB 3 — Profit and Loss Statement

          Instructional Guidelines

          Item No. Item Guidance
          3.1 Interest income Include both actually received interest and receivable interest which has accrued but has not yet been received, generated for example by:
          •   Cash and liquid assets
          •   Trading securities
          •   Investment securities
          •   Derivatives in the non-trading book
          •   Loans and advances
          •   Investment / loans to parent entity / loans to associates / joint venture
          •   Other investments
          •   Other interest earning assets
          3.2 Interest expense Include both interest actually paid and interest payable which has accrued but has not yet been paid, linked to, for example:
          •   Deposits;
          •   Other borrowings;
          •   Derivatives in the non-trading book;
          •   Bonds, notes and other borrowings;
          •   Loan capital;
          •   Loan from parent entity;
          •   Loan from associates / joint ventures;

          Other interest bearing liabilities.
          3.4 Income from fees and commissions Include charges made for services provided by the reporting institution, for example the provision of:
          •   Current account facilities;
          •   Corporate advice;
          •   Investment management and trustee services;
          •   Guarantees and indemnities;
          •   Commission on the sale of insurance or travellers cheques;

          Foreign exchange services (if they can be separately identified).
          3.5 Fees and commission expense Include charges for all services rendered to the company by third parties (excluding those which have the character of interest).
          3.8 Net income from trading securities Include all profits or losses (including revaluation profits or losses) other than those arising from the sale of investments in subsidiary or associated companies, trade investments or the amortisation of premiums or discounts on the purchase of fixed maturity investments which are not held for dealing.
          3.9 Net income from investment securities Include net income/(losses) from investments other than the trading securities, such as available for sale and held to maturity investments.
          3.10 Income from Islamic contracts Income derived from any Islamic business undertaken by the Authorised Firm.
          3.11 Other operating income Include under this heading income from any other source (other than extraordinary items), for example:
          •   Revaluations of foreign exchange positions;
          •   Revaluation of any investment in subsidiaries or associates (if equity accounting);
          •   Share of profits from associated companies (if reporting on a consolidated basis);
          •   Profit or loss on the sale of non-trading assets — e.g. premises, equipment, subsidiary and associated companies and trade investments;
          •   Revaluation surpluses/deficits - following normal accounting practice.
          •   Any other source (other than extraordinary items which should be included in PIB 3 Item No. 3.18
          3.12.1 Provisions General Total provisions to cover non-specific bad debt provisions.
          3.12.2 Provisions Specific Total of provisions made against specific exposures.
          3.12.3 Provisions Islamic Those provisions arising from any Islamic business undertaken
          3.12.4 Provisions Other To include, for example, provisions made for taxation or dividends.
          3.13 Staff expenses Include, for example:
          •   Salary costs;
          •   Employer's contribution to any pension scheme;
          •   Costs of staff benefits paid on a per capita basis such as private medical insurance.
          3.14 Depreciation & Amortisation Charges relating, for example, to depreciation / amortisation of property, plant and equipment and other amounts written off in respect of tangible and intangible fixed assets.
          3.15 Other operating expenses Examples of expenses can be as follows:
          •   Occupancy expenses — for example, rates, rent, insurance of building, lighting, heating, maintenance costs and subsidised restaurants;
          •   Equipment;
          •   Other overhead expenses;
          •   All other expenditure not falling into one of the other specific categories.
          3.16 Operating profit from ordinary activities Sum of PIB 3 Item Nos. 3.1 to 3.15. (excluding sub totals at items nos 3.3 and 3.6).
          3.17 Net income from subsidiaries and associated companies Profit / losses received from subsidiaries, joints ventures and other associated undertakings.
          3.18 Profit (loss) from extraordinary Items For example:
          Profit or losses on sale or termination of an operation;
          Profits or losses on disposal of fixed assts.
          3.19 Profit (loss) before tax Sum PIB 3 Item Nos. 3.16 + 3.17 + 3.18.
          3.20 Tax on (profit)/loss Any amount that has been or is expected to be paid in taxation.
          3.21 Profit / (loss) after tax Sum of PIB 3 Item Nos. 3.19 + 3.20.
          3.22 Minority interests For example, when a group has one or more subsidiaries which are only partially owned by the group.
          3.23 Net profit / (loss) The amount of profit / loss that could be distributed to shareholders (or partners) or retained for future use within the company. Sum of PIB 3 Item Nos. 3.21 + 3.22.
          3.24 Dividends and other distributions, declared or paid The amount to be distributed in the current year to shareholders out of the profits of a company.
          3.25 Partners' Drawings, declared or paid The amount to be distributed in the current year to partners out of the profits of a partnership.
          3.26 Other adjustments Any other adjustments that affect the retained profits.
          3.27 Retained profits for the reporting period Profits that have not been paid out as dividends to shareholders or withdrawn by partners but retained for further investment by the company. Sum of PIB 3 Item Nos. 3.23 - 3.24 - 3.25 - 3.26.

        • PRU 2.2.17 Guidance for Form PIB 4 — Profit and Loss — Islamic Financial Institutions

          Instructional Guidelines

          Item No. Item Guidance
          4.1.1 Income from jointly financed accounts Authorised Firms should include in respect of this item income earned on funds from jointly financed investment accounts (i.e. unrestricted PSIAs and self-financed). The income should be gross before allocating to the unrestricted PSIAs and the bank's mudarib fee.
          4.1.2 Allocated to unrestricted account holders Authorised Firms should include in respect of this item the amount allocated from PIB 4 Item No. 4.1.1 above to the unrestricted PSIAs as their share of the income. It should be mostly be a negative number.
          4.1.3 Authorised Firm's Mudarib fee Authorised Firms should include in respect of this item the amount of the Mudarib fee that they are entitled to receive for the management of the unrestricted PSIAs.
          4.1.4 Authorised Firm's other fees Include any amounts owing to the Authorised Firm as fees for managing PSIAR accounts.
          4.1.5 Net income from Jointly Financed Accounts and Mudarib Fees Sum of PIB 4 Item Nos. 4.1.1 + 4.1.2 + 4.1.3 + 4.1.4.
          4.2.1 Authorised Firm's income from its own non-financing activities Authorised Firms should include in respect of this item the income received from non-financing activities (e.g. Murabaha sales) that results from the employment of the Authorised Firm's own funds and current accounts. The income should have been generated from funds that have been employed separately from the PSIA funds.
          4.2.2 Authorised Firm's income from its own financing and investment activities Authorised Firms should include in respect of this item the income received from financing and investment activities that results from the employment of the Authorised Firm's own funds and current accounts. The Bank is solely entitled to profits/ (losses) from these activities.
          4.2.3 Net fees and commission income Authorised Firms should include in respect of this item the income received for services provided such as trade related letters of credit, Corporate advice, Investment management and trustee services, Kefala (guarantees) and indemnities.
          4.2.4 Other operating income Include income from any other source not included in any of the above.
          4.2.5 Total income from Authorised Firm's own funds Sum of PIB 4 Item Nos 4.2.1 + 4.2.2 + 4.2.3 + 4.2.4.
          4.3 Staff costs Include costs such as:
          •   Wages and salaries;
          •   Social security contributions;
          •   Contribution to any pension schemes (employer's share);
          •   Costs of staff benefits paid.
          4.4 Premises and equipment costs Should include rent, property tax, lighting, heating, maintenance costs etc.
          4.5 Depreciation and amortisation Charges relating, for example, to depreciation / amortisation of property, plant and equipment and other amounts written off in respect of tangible and intangible fixed assets.
          4.6 Provision for losses on Islamic contracts Provision for losses on Islamic Contracts: refer to FAS 11 of AAOIFI which requires the inclusion of bad and doubtful Islamic Financing and non financing contracts and investments.
          4.7 Other provisions Include here all other provisions other than for Islamic contracts.
          4.8 Other operating expenses Include all other expenses not included in any of the above.
          4.9 Operating profit from ordinary activities Sum of PIB 4 Item Nos. 4.1.5 + 4.2.5 - 4.3 - 4.4 - 4.5 - 4.6 - 4.7 - 4.8.
          4.10 Net income from subsidiaries and associated companies Report share of profits and losses of from subsidiaries and associated companies.
          4.11 Profit (loss) from extraordinary items For example:
          Profit or losses on sale or termination of an operation;
          Profits or losses on disposal of fixed assts.
          4.12 Profit (loss) before Zakah and tax Sum of PIB 4 Item Nos. 4.9 + 4.10 + 4.11.
          4.13 Zakah Include Zakah amount calculated with reference to FAS 9 of AAOIFI.
          4.14 Tax on profit / loss Any amount that has been or is expected to be paid in taxation.
          4.15 Profit (loss) after Zakah and tax Sum of PIB 4Item Nos. 4.12 - 4.13 - 4.14.
          4.16 Minority interests For example, when a group has one or more subsidiaries which are only partially owned by the group.
          4.17 Net profit / (loss) The amount of profit (loss) that could be distributed to shareholders or retained for future use within the company. Sum of PIB 4 Item Nos. 4.15 - 4.16.
          4.18 Dividends, and other distributions, declared or paid The amount to be distributed in the current year to shareholders out of the profits of a company.
          4.19 Other adjustments Any other adjustments that affect the retained profits.
          4.20 Retained profits for the reporting period Sum of PIB 4 Item Nos. 4.17 - 4.18 - 4.19.

        • PRU 2.2.18 Guidance for Form PIB 5 — Expenditure Based Capital Minimum

          Instructional Guidelines

          An Authorised Firm in Categories 2, 3 or 4 must complete this form in accordance with PIB Section 2.5.

          Item No. Item Guidance
          5.1 Total expenses This figure should correspond to Form PIB 3, Sum of Item Nos. 3.6 + 3.2 + 3.5 + 3.12 + 3.13 + 3.14 + 3.15
          5.2 Staff bonuses All staff bonuses paid during the year except to the extent that they are non-discretionary.
          5.3 Employees' and directors shares in profits All employees' and directors shares in profits except to the extent that they are non-discretionary.
          5.4 Other appropriations of profits All such appropriations except to the extent that they are automatic. As per PIB Rule 2.5.2(2), a management charge should not be treated as an appropriation of profits.
          5.5 Shared commissions payable Those commissions that would no longer be payable if business were to cease.
          5.6 Interest charges in respect of borrowings made to finance the acquisition of realisable investments Interest that is paid in respect of borrowings made to finance the acquisition of the Authorised Firm's realisable investments
          5.7 Interest paid to clients on client money balances Include here interest paid on Client Money balances.
          5.8 Interest paid to counterparties Interest that is payable to counterparties in the Trading Book.
          5.9 Fees, brokerage and other charges An Authorised Firm may exclude commissions shared with third parties other than employees, directors, half commission men or appointed representatives. Fees, brokerage and other charges paid for the purposes of executing, registering or clearing transactions may also be excluded.
          5.10 Foreign exchange losses Losses arising from the translation of foreign currency balances may be excluded.
          5.11 Contributions to charities The contribution that would no longer be paid if business were to cease.
          5.12 Total expenditure PIB 5 Item No. 5.1 less the Sum of PIB 5 Item Nos. 5.2 to 5.11.
          5.13 Fraction applied As set out in PIB Rule 2.5.1 (a), (b) or (c).
          5.14 Expenditure based capital minimum Use the expenditure based capital minimum amount calculated as per the provisions of Rules PIB 2.5.1, PIB 2.5.2 and PIB 2.5.3.

        • PRU 2.2.19 Guidance for Form PIB 6 — Capital Adequacy Calculation

          Instructional Guidelines

          The structure of this reporting form, which applies to all Categories of Authorised Firm, is designed first to calculate the total eligible capital resources after the appropriate amounts have been charged to cover trading and non trading book risks. It takes into account limitations on the use of different types of capital, including Tiers 1 and 2 capital components. Secondly, it provides a snapshot of the institution's capital adequacy at the reporting date by comparing the adjusted capital resources calculated as described above to the total capital requirement.

          Most of this form involves the inputting of numbers that have been provided in other returns and particular care should be taken to ensure that numbers have been transposed correctly.

          Item No. Item Guidance
          6.0 Capital Adequacy See PIB Section 2.6 and Table 2.6.1 for a summary of the components of capital base. PIB Section 2.7 describes each capital component in greater detail. Attention is drawn to Partnership Capital which constitutes the capital accounts of partners when the business is created. It must share the same characteristics as permanent share capital, particularly the fact that it must rank for repayment upon winding up or insolvency after all debts and liabilities have been paid. The deduction for partners drawings is in respect of any excess in drawings over current period profits. Attention is also drawn in respect of PIB Rule 2.7.3 in respect of the limitation on the use of general provisions in Tier 2 capital.
          6.1–6.22 Tier 1 and Tier 2 capital Authorised Firms should note that there are related guidance notes on the capital base for Forms PIB 1 and PIB 2. The guidance there would apply in their entirety to this section of the return.
          6.23 Deduction for excess of reserves This applies only in respect of Category 5 Authorised Firms with regards the Investment Risk and Profit Equalisation Reserves. See PIB Section 2.9.
          6.25 NTB Capital Requirement See PIB Rule 2.8.3 for a definition of the components of non trading book capital. For Category 5 Authorised Firms, the CRCOM and FER are on self financed assets only. These numbers will be derived from Forms PIB1 and PIB 2 for Category 1-4 Authorised Firms and Category 5 Authorised Firms, respectively. The DCR charges are derived from Form PIB 1 Appendix 4 and Form PIB 2 Appendix 8 for Category 1-4 Authorised Firms and Category 5 Authorised Firms, respectively.
          6.30 Capital allocated to the NTB The limitations on the use of capital allocated to the NTB are set out in PIB Section 2.8.
          6.34 TB Capital Requirement This is defined in PIB Rule 2.8.3. For Category 1-4 Authorised Firms, the numbers here are derived from Form PIB 1, Appendices 2 and 3. Also see guidance notes relating to those appendices. For Category 5 Authorised Firms, the capital requirements are in respect of self financed assets only (PSIA assets are subject to a DCR charge). These numbers are derived from Form PIB 2, Appendices 4 and 7.
          6.42 Capital allocated to the TB Note the limitation on the use of Tier 2 capital as referenced to PIB Rule 2.8.2 (b) (iii). Category 1 and 5 Authorised Firms must exclude from Tier 2 trading book capital any excess over 200% of Tier 1 trading book capital. For Category 2-4 Authorised Firms, the appropriate percentage is 250%.
          6.51 Deductions from total capital resources The deductions in respect of connected lending, material holdings and qualifying holdings are defined in Rules PIB 2.7.4, PIB 2.7.5 and PIB 2.7.6, respectively.
          6.59 Capital Requirement The non additive thresholds of capital are set out in PIB Rule 2.3.1. Details of the base capital requirement are further analysed in PIB Section 2.4. The Expenditure Based Capital Requirement definition is set out in PIB Section 2.5 and applies to Categories 2, 3 and 4 Authorised Firms only.
          6.61 Resources less requirement Note that the total of resources over requirement is expected to be positive. In the event of the requirement exceeding resources, Authorised Firms should make immediate contact with DFSA and not wait till the form has been submitted.
          6.62 Risk Asset Ratio Obtained by dividing total capital resources by the risk weighted assets (whether on the trading or non trading books). The risk weighted assets have been reported by Authorised Firms in the preceding Forms PIB 1 and 2. The capital resources are summarised in Form PIB 6.

        • PRU 2.2.20 Guidance for Form PIB 7 — Large Exposures

          Instructional Guidelines

          An Authorised Firm is required to identify and manage its exposures in accordance with PIB Rule 4.5.6 and PIB section A4.8.

          As per the Glossary, an Exposure, whether in an Authorised Firm's Non-Trading Book or Trading Book, or both, to a Counterparty or Group of Closely related Counterparties connected to the Authorised Firm which in the aggregate equals or exceeds 10% of the Authorised Firm's Capital Resources.

          The 20 largest exposures should be listed and, if requested, any other exposure that exceeds 10% of the Authorised Firm's Capital Resources. Only exposures that are non-exempt are required to be reported in the first two tables.

          Item No. Column Item Guidance
          7.1   Capital Resources The capital resources used as the basis for monitoring and controlling large exposures should be calculated in the same way as those used for capital adequacy monitoring, i.e. the sum of allowable Tier 1 and Tier 2 capital less any deductions (as set out in PIB Table 2.6.2) — as per Form PIB6, Item No. 6.58.
          The various percentage amounts should be specified in the relevant sections.
          7.2   Twenty Largest Exposures Include in this table the twenty largest exposures to all types of Counterparty except those that are considered to be exempt.
          Exposures to individual, or groups of closely related, Counterparties should be reported in descending order by size. Exposures to individual Counterparties which constitute a group of closely related Counterparties should be reported as one aggregate exposure.
            A Counterparty The identity of a Counterparty, as defined in the Glossary, in this context will generally be one of the categories as set out in PIB Rule A4.8.6.
            B Connected, Unconnected — Bank, Unconnected — Other, Government The Authorised Firm should clarify here into what category an exposure falls. These are set out in detail in Rules PIB A4.8.7 to PIB A4.8.11 but for the purposes of this form, an Authorised Firm should state whether an Exposure is to:
          (i) a Connected Counterparty;
          (ii) an Unconnected Counterparty or group of Closely Related Counterparties that are predominantly comprised of non-financial businesses;
          (iii) an Unconnected Counterparty or group of Closely Related Counterparties that are predominantly comprised of financial businesses;
          (iv) Central governments and central banks.
            C Amount of non-exempt exposure For exposures arising in the Non-Trading Book the amount at risk should, with certain exceptions detailed below, be reported as the book value of the Authorised Firm's actual or potential claims, contingent liabilities or assets.
          Exposures should be calculated in accordance with IFRS or AAOFI standards.
          For exposures arising in the Trading Book, all positions should be marked-to-market daily. Where a market determined price is not readily available, the Authorised Firm may generate its own mark-to-market valuation. Positions should be valued in accordance with the procedures outlined in the Authorised Firm's trading book policy statement.
          This is set out in more detail in Rules PIB A4.8.13 to PIB A4.8.31.
            D Specific bad debt provision Include here the amount of specific bad debt provision that may have been made against a particular exposure.
            E Reduction by netting, collateral etc. As set out in PIB Rule 4.5.6 (d) (ii), the value of an exposure can be reduced through the following:
          •   Collateral — discussed in more detail in PIB Section 4.6 and PIB Rule A4.8.32
          •   Netting — discussed in more detail in Sections PIB 4.7 and PIB A4.9
          •   Securitisation — discussed in more detail in Sections PIB 4.8 and PIB A4.10
          •   Credit derivatives — discussed in more detail in Sections PIB 4.9 and PIB A4.11.
            F Exposure at reporting date after eligible set-offs Column C less the amounts in Columns D and E.
            G Amount of this exposure financed by own assets or unrestricted PSIAs For Exposures arising out of Islamic business, this column should be used to quantify the amount of the Exposure that is financed by the Authorised Firm's own assets or by unrestricted PSIA assets.
            H Amount of this exposure financed by restricted PSIAs. For Exposures arising out of Islamic business, this column should be used to quantify the amount of the Exposure that is financed by restricted PSIA assets.
          7.3   Detail of exposures to connected counterparties This section comprises the disaggregated detail of all connected lending and exposures should be split into different counterparties within the connected group.
            A Financial or Non-financial company An Authorised Firm should indicate here if the exposure is to a bank or non-bank within its own group.
            B-H As for Item No. 7.2 As detailed above for the table in for Item No. 7.2.
          7.4   Ten Largest Exempt Exposures An Authorised Firm is required to identify its exempt and partially exempt exposures as per Rules PIB 4.5.6 (e) and PIB A4.8.1 to PIB A4.8.4.
            A Reason for exemption The Authorised Firm should specify here under what section of PIB A4.8.1PIB A4.8.4 the Exposure is captured.
            B-H As for Item No.7. 2 As detailed above for the table in for Item No. 7.2.

          Additional detail for Form PIB 7 — Appendix 1 — Largest 25 Exposures arising from Islamic contracts

          Item No. Contract type Guidance
          7A1.1 Musharaka Report all Musharaka contracts currently outstanding that exceed 10% of the Authorised Firm's Capital Resources. Details regarding the following should be included:
          •   Whether the capital has been self financed or provided by PSIA accounts
          •   The amount of capital redeemed during the period such as in the case of a diminishing Musharaka.
          •   Any income or loss declared, any provisions being made to the value of the Musharaka and the net value of the investment.

          FAS 4 of AAOIFI refers.
          7A1.2 Mudaraba Report all Mudaraba financing contracts that would qualify as a Large Exposure. Identify the basis on which the Authorised Firm has provided the financing i.e. whether on a self financed or on a PSIA funds basis. FAS 3 refers.
          7A1.3 Istisna'a/Parallel Istisna'a Report all Istisna'a contracts that would qualify as a Large Exposure. Identify the value of the Parallel Istisna'a and indicate what proportion of the value has been financed by Authorised Firm's own capital and the funds of PSIA account holders. FAS 10 refers.
          7A1.4 Salam/ Parallel Salam Report all Salam contracts and Parallel Salam amounts that would qualify as a Large Exposure. The data is to be split into values financed by Authorised Firm's own capital and the restricted and unrestricted PSIA account holders. FAS 7 refers.
          7A1.5 Ijarah/ Ijarah Muntahia Bittamleek Report all Ijarah assets on the valuation basis set out in FAS 8. Report also, all assets transferred to lessee for consideration or gift including the value of impairment before transfer of legal asset. State total depreciation/ amortisation charge and the net book value. This information is required to be provided for self financed and both forms of PSIA accounts. The data is to be split by the industrial sectors identified in the reporting statement. FAS 8 refers.
          7.A1.6 Murabaha Report here all Murabaha exposures that would qualify as a Large Exposure. Divide exposures into self financed, PSIAR and PSIA unfunded exposures. FAS 2 refers.
          PIB 8 — LIQUIDITY MISMATCH

          As set out in PIB Rule 6.3.3, an Authorised Firm in Category 1 or 5 must use the Maturity Mismatch approach to measure its liquidity. This applies equally to Authorised Firms that have a branch presence in the DIFC as to those that are incorporated.

          In accordance with PIB Rule 6.3.4, an Authorised Firm needs to complete separate returns for a business that is funded by: (i) its own assets; (ii) restricted PSIA assets; and (iii) unrestricted PSIA assets.

          Liquidity reporting in individual currencies
          The return should be completed on the basis of all currencies combined. Currencies should be translated into $ at the closing spot mid price on the reporting date and entered in the relevant time band. However, the DFSA may require institutions to provide management information on positions in individual currencies in the event of difficulties either in the individual institution or with the currency in question.

          Cashflow versus maturity analysis approach
          The policy aim is to ensure that institutions hold sufficient liquid assets to meet their obligations as they fall due and the DFSA has set mismatch guidelines to help secure the policy objective. The Form PIB 8 monitors Authorised Firms' compliance with the limits in two ways: firstly, by including a maturity analysis of known and/or potential cashflows out to six months and secondly, by a maturity analysis of assets and liabilities from 6 months to 5 years.

          Institutions should report both inflows and outflows on the same basis. Therefore, if an institution reports inflows on the cashflow basis out to three months, it should also report outflows on the cashflow basis out to three months.

          Items reported on a cashflow basis should include both interest and principal amounts, together with any other income relating to them. Items reported on a maturity basis should be reported at their value on the institution's books. However, any cashflows arising from these items (e.g. interest payments) within the cashflow reporting period should be included in the relevant cashflow periods. Thus cashflows (e.g. interest payments on a loan) arising from items (however reported) should be entered in the relevant cashflow timebands (i.e. those which the institution reports) when they fall due.

          Provisions
          Items should be reported net of specific provisions. General provisions should not be recorded on this return.

          Residual Maturity
          As set out in PIB Rule A6.2.1, outflows (such as deposits and other liabilities) are to be included according to their earliest possible repayment date. In this context, the earliest repayment date means the first rollover date or the shortest period of notice required to withdraw the funds or to exercise a break clause, where applicable. Inflows (such as loans) are to be entered as occurring on the latest possible repayment date. Purely technical break facilities should be disregarded for fixed term loans. Where the Authorised Firm has loans outstanding at the reporting date under revolving credit lines and has not received notification that they will be redrawn on maturity, the intermediate date should be taken as the maturity date.

          Time bands
          The time band 'Overdue'should be used to record cashflows where assets or other items giving rise to cashflows are non-performing, poorly performing or there is reasonable doubt about the certainty of receipt of inflows of funds pertaining to them. Where an asset or cashflow previously reported as overdue is contractually rescheduled according to a written agreement, institutions should cease to report these items as 'overdue' and report them according to the new agreed dates for repayment.

          The timeband 'Demand (incl next day)' comprises cashflows or asset items due, available or maturing on the next business day after the reporting date. Cashflows arising or assets/liabilities maturing on a non-business day should be reported as taking place on the following business day. Funds callable at one day's notice should be entered as two-day maturity unless notice has been received or given on the reporting date.

          Netting of debts and claims
          All claims and liabilities should be reported gross. Authorised Firms should not net (or offset) claims on counterparties or groups of counterparties against debts owed to those counterparties or groups of counterparties, even where a legal right of set off exists. Where the maturity of the claims and debts falls within the same timeband, the claims and debts will automatically offset each other on the return in the calculation of the mismatch.

          Marketable securities
          An asset is considered to be marketable if it meets the requirements as set out in PIB Section A6.3(2) — essentially, these are assets that could be readily converted into cash where necessary. These assets, outlined in Column A, are reported in rows 8.1.1–8.1.10, Highly liquid / marketable assets. Authorised Firms should enter the full value of the marketable asset concerned in Column B, apply the discount rate as in Column C, and thereby calculate the discounted mark to market value of the asset in Column D. Discounts are applied to reflect that an institution may realise less than the market price quoted for an asset where the institution is seeking to realise assets quickly because of liquidity problems pertaining either to itself, or to general market conditions, or both.

          The Authorised Firm should then allocate the discounted value of the assets to either of Columns G or H determined by the length of the settlement period for the instrument in question. This reflects the length of time it would take for an Authorised Firm to receive the proceeds of any sale. Where the settlement period for items is more than eight days, or where there are other factors which mean that funds would not be received within eight days, were the assets are sold or repo'd today, then the funds should be recorded as receivable Column H 'Over 8 days to 1 month'. Where settlement or other delays mean that funds would not be received within one month, then the items should be recorded in the maturity analysis section of the form.

          Marketable assets maturing at exactly one month should be reported in the cashflow section of the return. Authorised Firms may however include the full value of the asset in the one month timeband and not discount at all during the life of the asset.

          Where assets have a residual maturity of less than one month, the DFSA recognises that it is not relevant to apply automatically a discount to such assets. In general, these assets should be entered as cashflows in the relevant timebands in rows 8.1.12–8.1.25 and no discount will be applied.

          Assets which do not meet the criteria for marketable assets, or which cannot be fitted into the table in PIB Rule A6.3.1(4), are non-marketable assets for the purposes of this return and should be reported in the form according to their residual maturity. This covers for example:
          a. Non-investment grade debt instruments (as rated by a recognised credit agency) issued by a Zone 2 issuer;
          b Non-investment grade debt instruments (as rated by a recognised credit agency) issued by a non-government Zone 1 issuer;
          c. Commercial paper and certificates of deposit that do not meet the definition of marketable assets.

          Authorised Firms should ensure that there is no double counting of cashflows (of principal or interest) arising from holdings of marketable assets on the form.
          Item No. Item Guidance
          8.1 INFLOWS  
            Highly liquid / marketable assets As described in detail above.
          8.1.1 Cash Holdings of notes and coins.
          8.1.2

          8.1.3

          8.1.4
          Cen gov't (Z1) sec — 1 yr or less

          Cen gov't (Z1) sec — 1–5 yrs

          Cen gov't (Z1) sec — over 5 yrs
          Central government (including central government guaranteed) paper and paper eligible for discount at the Central Bank issued a Zone 1 Central Government / another Zone 1 issuer. Both fixed and variable rate securities should be reported. Only record those securities currently in the reporting institution's ownership.
          8.1.5

          8.1.6

          8.1.7
          Non gov't sec — 6 mths or less

          Non gov't sec — 6 mths–5 yrs

          Non gov't sec — over 5 yrs
          Debt instruments that are of investment grade. Only those securities in the reporting institution's ownership, which the institution may freely dispose of at any time with no restrictions, should be recorded. Those assets pledged to another institution or otherwise encumbered should not be included.
          8.1.8 Other cen gov't debt (active) Central government (including central government guaranteed) paper and paper eligible for discount at the Central Bank issued by a Zone 2 Central Government/ another Zone 2 issuer. Include only that debt issued by, or fully guaranteed by, Zone 2 central governments and central banks that is actively traded. Only the debt currently in the reporting institution's ownership should be recorded.
          8.1.9 Highly liquid equities Equities that are eligible for a specific risk weight of 4% or less under the DFSA's Rules regarding the capital requirement for Market Risks and which are currently in the reporting institution's possession.
          8.1.10 Total Sum of Item Nos. 8.1.1–8.1.9, for Columns B, D, G, H and K. With 8.1.10 K being the overall total amount of marketable assets.
          8.1.11 Non-marketable securities Securities which the Authorised Firm holds or will receive, but which it cannot classify as marketable. These should be reported according to the redemption value of the asset or alternatively, where the redemption value is unavailable or not appropriate (e.g. in the case of equities), the book value. Marketable assets maturing within one month reported at their full marked-to-market value, i.e. undiscounted, should also be reported here.
          8.1.12 Inter-bank Inflows arising from placements with other financial institutions. Include the inflows from those entities that would attract a 20% counterparty weighting. Include also that element of committed facilities provided to the Authorised Firm where notification of draw down date has been given. Exclude inflows from any bank entities within the group.
          8.1.13 Intergroup / related Inflows from counterparties connected to the Authorised Firm. Entries should be made in this item rather than any other item in the Wholesale section if any intragroup/connected counterparties are involved.
          8.1.14 Corporate Inflows from non-bank, non-connected corporate counterparties. Initial margins held at clearing houses should be entered here according to their residual maturity. Repayments from leases should also be recorded in this line.
          8.1.15 Govt / public sector — Zone 1 Inflows from central governments, public sector entities, local authorities and central banks in Zone 1 countries.
          8.1.16 Govt / public sector — Zone 2 Inflows from central governments, public sector entities, local authorities and central banks in Zone 2 countries.
          8.1.17 Repos / reverse repos Include any transactions relating to repos and reverse repos. Authorised Firms should also enter any transactions relating to stock borrowing and lending.
          8.1.18 Forward foreign exchange Cashflows relating to forward purchases of foreign currency, where an exchange of principal is effected at the start or maturity of the swap. The amount received should be entered in the appropriate maturity band.
          8.1.19 Forward sales and purchases The cash leg of any forward sales should be treated as an inflow in the timeband corresponding to the date of the forward sale. For forward purchases, where the asset purchased is a marketable asset, the Authorised Firm should report the USD equivalent discounted value of the security purchased at the maturity of the contract. Where the asset purchased is non-marketable, the institution should enter the USD equivalent discounted value of the security at the maturity of the asset.
          8.1.20 Swaps & FRAs For interest rate and currency swaps, enter the receipts of fixed and floating legs in the cashflow section. For FRAs, enter the marked-to-market receipt in the relevant time period. The amount of receipts should be derived from the contract's present value at yields prevailing at the reporting date.
          8.1.21 Commodities Inflows from the sale of commodities held by the Authorised Firm.
          8.1.22 Trade related letters of credit Inflows arising from trade related letters of credit.
          8.1.23 Fees (incl Mudarib) Report here fees, commissions or other income receivable by the Authorised Firm relating to their wholesale business, according to their known date of receipt. Where the date of receipt is unknown, do not report these flows.
          8.1.24 Other funding sources Include here any other funding sources not included elsewhere, according to their cashflows.
          8.1.25 Total wholesale Inflows Sum of Item Nos. 8.1.11–8.1.24, Columns E to J with total in Column K and Columns L to N with total in Column O.
          8.1.26 Total inflows on a cashflow basis

          Total on a maturity basis
          Sum of Item No. 8.1.10, Column K + Item Nos. 8.1.11–8.1.24, Columns E to J, with the total in Column K.

          Sum of Item Nos. 8.1.11–8.1.24, Columns L to N. with the total in Column O.
          8.2 OUTFLOWS  
          8.2.1 Non-marketable securities Include here at residual maturity outflows pertaining to maturing securities or debt instruments, which cannot be classified as marketable. Marketable assets maturing within one month at their full marked-to-market value, i.e. undiscounted should also be reported here.
          8.2.2 Inter-bank Funds Outflows arising from placements with or from, or repayments of loans to or from, banks. Also include the entire outflows to those entities that would attract a 20% counterparty weighting. Exclude from this item loans to, or placements with, or deposits / placements from, bank entities within the group.
          8.2.3 Intergroup / related Outflows of funds to counterparties connected to the reporting institution. Entries should be made in this item rather than any other item in the Wholesale section if any intragroup/connected counterparties are involved.
          8.2.4 Corporate Outflows to non-bank, non-connected, corporate counterparties.
          8.2.5 Govt / public sector — Zone 1 Report funds lent to central governments, public sector entities, local authorities and central banks in Zone 1 countries. Where an Authorised Firm is required to place funds on deposit with central banks and monetary authorities, these should be entered as an outflow in the relevant time band.
          8.2.6 Govt / public sector — Zone 2 Report funds lent to central governments, public sector entities, local authorities and central banks in Zone 2 countries. Where an Authorised Firm is required to place funds on deposit with central banks and monetary authorities, these should be entered as an outflow in the relevant time band.
          8.2.7 Repos / reverse repos Outflows related to repos or reverse repos. Also include any outflows relating to stock borrowing and lending.
          8.2.8 Forward foreign exchange Enter any cashflows relating to forward sales of foreign currency, where an exchange of principal is effected at the start or maturity of the swap. The amount paid should be entered in the appropriate maturity band.
          8.2.9 Forward sales and purchases For forward sales, the sterling (or euro) equivalent discounted value of the security sold should be recorded as an outflow. The cash leg of any forward purchases should be treated as an outflow in the timeband corresponding to the date of the forward purchase.
          8.2.10 Swaps & FRAS For interest rate and currency swaps, enter payments of fixed and floating legs in the cashflow section.
          For FRAs, enter the marked-to-market payment in the relevant time period. The amount paid should be derived from the contract's present value at yields prevailing at the reporting date.
          8.2.11 Commodities Outflows from the purchase of commodities held by the Authorised Firm.
          8.2.12 Trade related letters of credit Outflows arising from trade related letters of credit.
          8.2.13 Dividends, tax & other costs Outflows arising from dividends, tax etc.
          8.2.14 Ijarah asset purchases Outflows for commitments made for the purchase of these assets.
          8.2.15 Other outflows Any outflows relating to payments of dividends and tax, or any other outflows that have not previously been reported elsewhere. Also report any outflows relating to settlement accounts, using the trade date plus the settlement period to determine the appropriate timeband.
          8.2.16 Other off-balance sheet Any outflows relating to off balance sheet items that have not been reported elsewhere.
          8.2.17 Total Wholesale Outflows Sum Item Nos. 8.2.1–8.2.16, Columns E to J with total in Column K and Columns L to N with total in Column O..
          8.2.18 Total Outflows on a Cashflow basis

          Total on a maturity basis
          Sum of Item Nos. 8.2.1–8.2.16, Columns E to J, with the total in Column K.

          Sum of Item Nos. 8.2.1–8.2.16, Columns L to N, with the total in Column O.
          8.3 CALCULATION OF LIQUIDITY MISMATCHES Authorised Firms should monitor compliance with their liquidity mismatch guidelines each business day and should report in this section the mismatch on the reporting date, using the data from the previous parts of the return.
          8.3.1 Type of business Denotes business financed by different sorts of assets.
          8.3.2 Timeband The timebands for which limits are set: Sight to 8 days and Sight to one month.
          8.3.3 Total discounted marketable assets Figure from row Item No. 8.1.10, Column G for S-8 days and Column G plus H for S-1 month.
          8.3.4 Total standard inflows Figure from row 8.1.25, column F plus G for S-8 days and Column F plus G plus H for S-1 month.
          8.3.5 Total standard outflows Figure from row 8.2.17, column F plus G for S-8 days and Column F plus G plus H for S-1 month.
          8.3.6 Total relevant deposits This figure provides the denominator for the mismatch calculation (see Item No. 8.3.7 below):
          •   For conventional Authorised Firms, the figure is obtained from Form PIB 1, Item No. 1.10.
          •   For Islamic Authorised Firms, see next section of the table.
          •   For branches, figure from form PIB 9, item no 9.26.
          8.3.7 Mismatch as a % of total deposits As set out in Rules PIB 6.3.4 and PIB 6.3.5, the mismatch positions should not exceed -15% or -25% for the sight — 8 days and sight — 1 month timebands respectively.

          Additional Guidance for Islamic Contracts:

          8.1 Inflows   All inflows should be taken as occurring at the last possible contractual repayment date. The treatment of inflows for Islamic contracts are as follows and it is for the authorised institution to determine in which of the categories the inflows should be recorded. In the event of any doubt, the institution should contact its regular supervisory contact at DFSA.
              Mudaraba Inflows of capital should be reported at the latest redemption date or as assets maturing at the latest possible redemption date. Profits on Mudaraba should only be reported to the extent that it is being reported at the reporting date.
              Musharaka Capital inflows on a normal Musharaka contract should be entered as occurring on the latest possible termination date and in the case of a diminishing Musharaka at the latest redemption date. Inflows on profits should only be entered if it is being distributed at reporting date.
              Murabaha Receivables Inflows reported should include instalment payments and related accrued profit at the latest possible repayment date (or assets maturing at such a date).
              Ijarah/ Ijarah Muntahia Bittamleek Report all inflows occurring from Ijarah lease rentals at the last possible payment date. Where the lessee has option to purchase the asset either during the duration of the lease or at the end of the contract, the amount to be received should be reported as an inflow at the latest possible exercise date.
              Salam and Parallel Salam Enter the amount of inflows as occurring at the latest possible delivery date. If payments are received in the form of instalments (Parallel Salam), only enter the amount of instalments occurring at their latest possible repayment date (or as an asset maturing at the latest repayment date). Enter commodity flows separately in the line market commodities.
              Istisna'a and Parallel Istisna'a Inflows should be assumed to occur at the latest possible completion date. If repayment is via instalments, inflows should be on the latest instalment date.
          8.2 Outflows   All outflows should be taken as occurring at the earliest possible contractual repayment date. In the case of a Liability, assume the outflows to occur at the earliest possible maturity date. For Islamic contracts, outflows should only be recognised when there is al in existence a defined agreement between the parties for a particular Islamic Contracts. As previously stated, Authorised Firms will be expected to refer to the appropriate AAOIFI FAS pronouncement in respect of Islamic contracts. These include Mudaraba, Musharaka, Murabaha, Salam and Parallel Salam, Istisna'a and Parallel Istisna'a and Ijara or Ijarah Munatahia Bitamleek.
              Salam and Parallel Salam For Salam transactions enter amount of outflows as additional advances committed at the earliest possible drawdown date.
              Istisna'a Outflows on Istisna'a contracts are to be entered as occurring at the earliest possible drawdown date. If drawdown occurs based on percentage completion, the outflows should be assumed to occur at the earliest completion date or as a liability maturing at the earliest completion date.
              Ijarah Commitments made for the purchases of assets for Ijarah purposes should be included as outflows at the earliest date committed for the purchase.
          8.3.6 Total relevant deposits   For self-financed business, Authorised Firms should use the figure from Form PIB 2, Item No. 2.20.
          For business financed through PSIAs, the appropriate figure should be derived from the amounts due (akin to deposits) to PSIA account holders.

        • PRU 2.2.21 Guidance for Form PIB 9 — Branch Return

          Instructional Guidelines

          This return should only be completed by Authorised Firms that operate in or from the DIFC through a branch, rather than incorporated, office.

          Appendix 1 — Large Exposures is not applicable to Category 4 Authorised Firms.

          STATEMENT OF PROFIT AND LOSS

          Item No. Item Guidance
          9.1 Interest income Include both actually received interest and receivable interest which has accrued but has not yet been received, generated for example by:
          •   Cash and liquid assets
          •   Trading securities
          •   Investment securities
          •   Derivatives in the non-trading book
          •   Loans and advances
          •   Investment / loans to parent entity / loans to associates / joint venture
          •   Other investments
          •   Other interest earning assets
          9.2 Interest expense Include both interest actually paid and interest payable which has accrued but has not yet been paid, linked to, for example:
          •   Deposits;
          •   Other borrowings;
          •   Derivatives in the non-trading book;
          •   Bonds, notes and other borrowings;
          •   Loan capital;
          •   Loan from parent entity;
          •   Loan from associates / joint ventures;

          Other interest bearing liabilities.
          9.4 Income from fees and commissions Include charges made for services provided by the reporting institution, for example the provision of:
          •   Current account facilities;
          •   Corporate advice;
          •   Investment management and trustee services;
          •   Guarantees and indemnities;
          •   Commission on the sale of insurance of travellers cheques;

          Foreign exchange services (if they can be separately identified).
          9.5 Fees and commission expense Include charges for all services rendered to the company by third parties (excluding those which have the character of interest).
          9.8 Net income from trading securities Include all profits or losses (including revaluation profits or losses) other than those arising from the sale of investments in subsidiary or associated companies, trade investments or the amortisation of premiums or discounts on the purchase of fixed maturity investments which are not held for dealing.
          9.9 Net income from investment securities Include net income/(losses) from investments other than the trading securities, such as available for sale and held to maturity investments.
          9.10 Income from Islamic contracts Income derived from any Islamic business undertaken by the Authorised Firm.
          9.11 Other operating income Include under this heading income from any other source (other than extraordinary items), for example:
          •   Revaluations of foreign exchange positions;
          •   Revaluation of any investment in subsidiaries or associates (if equity accounting);
          •   Share of profits from associated companies (if reporting on a consolidated basis);
          •   Profit or loss on the sale of non-trading assets — e.g. premises, equipment, subsidiary and associated companies and trade investments;
          •   Revaluation surpluses/deficits - following normal accounting practice.
          9.12.1 Provisions General Total provisions to cover non-specific bad debt provisions.
          9.12.2 Provisions Specific Total of provisions made against specific exposures.
          9.12.3 Provisions Islamic Those provisions arising from any Islamic business undertaken
          9.12.4 Provisions Other To include, for example, provisions made for taxation or dividends.
          9.13 Staff expenses Include, for example:
          •   Salary costs;
          •   Employer's contribution to any pension scheme;
          •   Costs of staff benefits paid on a per capita basis such as private medical insurance.
          9.14 Depreciation & Amortisation Charges relating, for example, to depreciation / amortisation of property, plant and equipment and other amounts written off in respect of tangible and intangible fixed assets.
          9.15 Other operating expenses Examples of expenses can be as follows:
          •   Occupancy expenses — for example, rates, rent, insurance of building, lighting, heating, maintenance costs and subsidised restaurants;
          •   Equipment;
          •   Other overhead expenses;
          •   All other expenditure not falling into one of the other specific categories.

          STATEMENT OF ASSETS

          Item No. Item Guidance
          9.17.1 Cash and Balances with Central Banks Include, for example, the following amounts:
          •   Notes and coins;
          •   Long positions in Gold bullion (including Tola Bars);
          •   Amounts placed with central banks including funds required to be placed on deposit with central banks and monetary authorities.
          9.17.2 Treasury bills and other eligible bills Treasury bills issued by the national governments or by the Central banks on behalf of the governments. Also include bills issued by other entities, which are eligible for rediscounting with the central bank.
          9.17.3 Money market placements Include deposits at call and other money market placements with banks or other money market participants
          9.18.1 Trading securities Include investments acquired principally for the purpose of selling or repurchasing it in the near term for short-term-profit-taking. This would include but not limited to, debt, equity and hybrid instruments
          9.18.2 Derivative financial instruments Include, but are not limited to, positions representing the following instruments, recorded at fair value:

          Forward and Futures contracts in Currencies, Interest rates and other financial assets
          Forward rate agreements
          Currency and interest rate swaps
          Credit derivatives
          Option contracts on currency, interest rate and other financial assets.

          These derivatives include both the exchange-traded and over-the-counter versions.
          9.18.3 Other financial instruments at fair value through profit and loss Include all financial instruments which are, upon initial recognition, designated by the entity as financial assets to be measured at fair value through profit or loss other than the trading securities included in 9.18.1.
          9.18.4 Investment securities — available for sale Include non-derivative financial assets that are designated as available for sale by the firm or that have not been classified under any of the other categories of investment in section 9.18.
          9.18.5 Investment securities - held to maturity Include non-derivative financial assets with fixed or determinable payments and fixed maturity that the firm has positive intention and ability to hold to maturity.
          9.18.6 Investments in associated undertakings Include investments in entities, including unincorporated entities such as partnerships, over which the firm has significant influence and where the entity in question is neither a subsidiary nor a joint venture operation
          9.19 Loans and advances Amounts arising from, for example:
          •   Revolving credit facilities;
          •   Credit cards outstanding balances;
          •   Housing loans (both variable and fixed rates);
          •   Term loans (both variable and fixed rates);
          •   The book value of assets leased out under finance lease agreements;
          •   Loans made under conditional hire purchase contracts;
          •   Advances purchased by or assigned to the reporting institutions, factoring or similar arrangements
          •   Other loans and advances.

          The amounts reported should be gross of provisions (as specific and general provisions should be reported in the Liabilities section of the balance Sheet) and net of interest receivable.
          9.20.1 Murabaha and Istina'a receivables Report here all receivables relating to Murabaha and Istisna'a contracts. Refer to FAS 2 and FAS 10 of AAOIFI respectively.
          9.20.2 Ijarah assets and receivables Include Ijarah assets net of depreciation/ amortisation and Ijarah receivables. Refer to FAS 8 of AAOIFI.
          9.20.3 Mudaraba Financing Capital provided on a Mudaraba basis should be reported here. Refer to FAS 3 of AAOIFI.
          9.20.4 Musharaka Financing Report capital provided on a Musharaka basis. Refer to FAS 4 of AAOIFI. Investment in the share capital of another company should be reported under "Other investments".
          9.20.5 Other investments Include any other investments undertaken through Islamic contracts, including Parallel Istisna'a assets (refer FAS 10 of AAOIFI) and capital provided on Salam contracts (refer FAS 7 AAOIFI).
          9.21 Fixed assets Include, for example, the value of the following:
          •   Plant and equipment, the residual value of items leased out under an operating lease (excluding balances relating to named Ijarah assets which should be included separately in Item No. 9.20.2);
          •   Own premises being occupied or developed for occupation by the Authorised Firm, property (excluding property acquired / held available for sale which should be included in "Other Assets", Item No. 9.23).

          The amounts reported here should be net of accumulated depreciation and amortisation.
          9.22.1 Goodwill Include amounts relating to any purchased goodwill.
          9.22.2 Other intangible assets Items to be included:
          •   Capitalised development costs
          •   Brand names, trademarks and similar rights
          •   Licences and exchange seats which may be held as part of the Authorised Firm's trading requirement.
          9.23 Other assets Assets that have not been included in any of the items above. In particular, positions in short term securities held with the intention of resale, sundry debtors, prepayments and accrued income not identified elsewhere.
          9.25.1 Direct credit substitutes These relate to the financial requirements of counterparty where the risk of loss to the Authorised Firm on the transaction is equivalent to a direct claim on the counterparty. Include here
          •   Guarantees of a financial nature to stand behind the current obligations of customers (e.g. loan guarantees);
          •   Guarantees of leasing operations;
          •   Letters of Credit and Stand-by Letters of Credit to the extent that they do not qualify for inclusion in Item No. 9.25.3 "Trade related contingents" below;
          •   Guarantees of a capital nature such as undertakings given to a non bank financial company which are considered as capital by the appropriate regulatory body. Guarantees given to a company not connected to the reporting institution should be risk weighted at 100% and those for connected companies should be deducted from the reporting institution's capital base.
          •   Acceptances granted and risk participation in bankers' acceptances. Where the reporting institution's own acceptances have been discounted by that institution the nominal value of the bills held should be deducted from the nominal amount of the bills issued under the facility and a corresponding on balance sheet entry made.
          9.25.2 Transaction related Contingents These exposures relate to the on-going trading activities of a counterparty where the risk of loss to the reporting institution depends on the likelihood of a future event which is independent of the creditworthiness of the counterparty. They are essentially guarantees that support particular non financial obligations rather than a customer's financial obligations. Include here:
          •   Advance payment guarantees
          •   Performance bonds including bid or tender bonds, warranties and indemnities (indemnities given for lost share certificates or bills of lading and guarantees of the validity of papers rather than of payment under certain conditions should be reported here);
          •   Stand by Letters of Credit relating to a particular contract or to non financial transactions (including arrangements backing, inter alia, subcontractors' and supplier's performance, labour and materials, contracts and construction bids).
          9.25.3 Trade related Contingents Report short term self-liquidating trade related items such as documentary letters of credit issued by the reporting institution that are collateralised by the underlying shipment i.e. the credit provides for the reporting institution to retain title to the underlying shipment. L/C's issued without provision for the reporting institution to retain title to the underlying shipment should be reported under direct credit substitutes above.
          9.25.4 Sale and Repurchase Agreements Only report here sale and repurchase agreements where the asset sold is not reported on the balance sheet. Where the asset is off balance sheet, the appropriate counterparty weighting is determined by the issuer of the security and not according to the counterparty with whom the transaction has been undertaken.
          9.25.5 Forward Assets Purchases The appropriate counterparty weighting should be determined by the asset to be purchased and not the counterparty with whom the contract has been entered into. Include commitments for loans and other on balance sheet items with certain drawdown. Exclude foreign currency spot deposits with value date of up to two working dates after trade date.
          9.25.6 Forward Deposits Placed Relates to agreements between two parties whereby one will pay and the other receive an agreed rate of interest on a deposit to be placed by one with the other at some pre-determined rate in the future. The weight should be determined according to the counterparty with whom the deposit will be placed. Exclude foreign currency spot deposits with value date of up to two working dates after trade date.
          9.25.7 Uncalled partly-paid shares and securities Only include here if there is a specific date for a call. If there is no specific date for a call, the item should be included as a long term commitment under Item No. 9.25.10, "Other Commitments".
          9.25.8 NIF's and RUF's Note issuance and revolving underwriting facilities should include the reporting institutions underwriting obligations of any maturity. Where the facility has been drawn down by the borrower and the notes are held by someone other than the Authorised Firm, the underwriting obligation should continue to be reported at the nominal amount.
          9.25.9 Endorsement of Bills These should be reported at the full nominal amount, less any amount for bills which the institution now holds but had previously endorsed. Endorsement of bills not accepted by banks will attract the counterparty risk weighting of the issuer. If it has been endorsed by another bank, a reduced risk weighting applies.
          9.25.10 Other Commitments All other undrawn commitments are reportable here, divided into commitments under and over one year.
          9.25.11 Assets funded by restricted PSIAs The methodology for calculating exposures financed by PSIAs are, in principle, no different to calculating exposures for a reporting institution's self financed assets. All the guidance notes above apply in their entirety unless stated otherwise.

          STATEMENT OF TOTAL LIABILITIES

          9.26 Deposits Separately identify deposits due to the financial institutions in Item No. 9.26.1. All other deposits are to be reported in the other deposit section, Item No. 9.26.2.
          9.27 Tax Liability Report all items accrued and payable in respect of the Authorised Firm's current and future tax liabilities.
          9.28 Provisions All specific and general provisions in respect of Loans and Advances and other receivables should be reported here. Exclude provisions against Islamic contracts which should be reported in Item No. 9.30 below.
          9.29 Loan Capital and Hybrid Securities Report items such as subordinated loans drawn down by the Authorised Firm.
          9.30 Liabilities arising from Islamic contracts Liabilities arising from Islamic contracts include advances received against Salam contracts (defined in Para 3 and 19 of FAS 7 issued by AAOIFI and Ijarah investment payables (refer to FAS 8 of AAOIFI).
          9.31.1 Creditors and other Liabilities Report all items not included in any of the above, such as proposed dividends payable, sundry accruals and deferred income etc.
          9.31.2 Derivative financial instruments and other trading liabilities Include, but are not limited to, liabilities arising out of positions representing the following instruments, recorded at fair value:

          Forward and Futures contracts in Currencies, Interest rates and other financial assets
          Forward rate agreements
          Currency and interest rate swaps
          Credit derivatives
          Option contracts on currency, interest rate and other financial assets.

          These derivatives include both the exchange-traded and over-the-counter versions.

          STATEMENT OF LARGE EXPOSURES

          See Guidance for Form PIB 9 — Appendix 1 — Large Exposures — Branch.

        • PRU 2.2.22 Instructional Guidelines — Form PIB 9 — Appendix 1 — Large Exposures — Branch

          Instructional Guidelines

          An Authorised Firm operating through a branch presence is required as part of its general systems and controls obligations, to identify and manage the exposures agreed and undertaken by its operations.

          The 20 largest exposures, in absolute terms, to unconnected counterparties should be listed in the first table and the 10 largest exposures, again in absolute terms, to connected counterparties should be listed in the second table.

          Item No. Column Item Guidance
          9.A1.1   Twenty Largest Exposures (Unconnected) Include in this table the twenty largest exposures to all types of counterparty except those that are connected to the branch. Exposures to individual, or groups of closely related, counterparties should be reported in descending order by size. Exposures to individual counterparties which constitute a group of closely related counterparties should be reported as one aggregate exposure.
            A Counterparty The identity of a Counterparty, as defined in the Glossary, in this context will generally be one of the categories as set out in PIB Rule A4.8.6.
            B Unconnected — Financial, Unconnected — Other, Government The Authorised Firm should clarify here into what category an exposure falls. These are set out in detail in Rules PIB A4.8.7 to PIB A4.8.11 but for the purposes of this form, an Authorised Firm should state whether an Exposure is to:
          (i) an Unconnected counterparty or group of Closely Related Counterparties that are predominantly comprised of financial businesses;
          (ii) an Unconnected counterparty or group of Closely Related Counterparties that are predominantly comprised of non-financial businesses;
          (iii) Central governments and central banks.
            C Amount of exposure at risk For exposures arising in the Non-Trading Book the amount at risk should, with certain exceptions detailed below, be reported as the book value of the Authorised Firm's actual or potential claims, contingent liabilities or assets.
          Exposures should be calculated in accordance with internationally or AAOFI accepted accounting practice.
          For exposures arising in the Trading Book, all positions should be marked-to-market daily. Where a market determined price is not readily available, the Authorised Firm may generate its own mark-to-market valuation. Positions should be valued in accordance with the procedures outlined in the Authorised Firm's trading book policy statement.
          This is set out in more detail in Rules PIB A4.8.13 to PIB A4.8.31.
            D Exposure as a percentage of company's equity The branch should use as the denominator the amount its head office has available as regulatory capital (e.g. financial resources). This is intended to provide DFSA with a guide as to the relative size and importance of the exposure for the financial institution as a whole.
            E Specific bad debt provision Include here the amount of specific bad debt provision that may have been made against a particular exposure.
            F Reduction by netting, collateral etc. As set out in PIB Rule 4.5.6 (d) (ii), the value of an exposure can be reduced through the following:
          •   Collateral — discussed in more detail in PIB Section 4.6 and PIB Rule A4.8.32
          •   Netting — discussed in more detail in Sections PIB 4.7 and PIB A4.9
          •   Securitisation — discussed in more detail in Sections PIB 4.8 and PIB A4.10
          •   Credit derivatives — discussed in more detail in Sections PIB 4.9 and PIB A4.11.
            G Exposure at reporting date after eligible set-offs Column C less the amounts in Columns E and F.
            H Amount of this exposure financed by own assets or unrestricted PSIAs For Exposures arising out of Islamic business, this column should be used to quantify the amount of the Exposure that is financed by the Authorised Firm's own assets or by unrestricted PSIA assets.
            I Amount of this exposure financed by restricted PSIAs. For Exposures arising out of Islamic business, this column should be used to quantify the amount of the Exposure that is financed by restricted PSIA assets.
          9.A1.2   Ten Largest Exposures (Connected) Include in this table the ten largest exposures to connected counterparties i.e. the dis-aggregated detail of all connected lending and exposures should be split into different counterparties within the connected group.
            A - I Bank or non-bank As detailed above for the table in for Item No. 9.A1.1

        • PRU 2.2.23 Instructional guidelines for form PIB 12 — Geographical Distribution of Assets and Liabilities

          Instructional Guidelines

          1 Authorised Firms in prudential categories 1 and 5 are required to complete this form to measure its country risk transfers. All entries should be converted from the relevant currency to dollars at the closing spot mid price on the reporting date.
          2 The information reported covers claims, other exposures, and liabilities booked by the Authorised Firm at the DIFC office and its branches. The level of consolidation for this return should be the same as that for the balance sheet. The positions of the subsidiaries carrying out the Financial Services of Accepting Deposits and Providing Credit are to be consolidated into this return.
          3 The residency of counterparties on both an immediate borrower and ultimate risk basis is to be reported with the corresponding three digit country code provided in the List of Country Codes.
          4 All claims and other exposures are to be reported gross of any provisions for impairment. Accrued interest is to be excluded from all parts of the return. Exclude all gold and silver balances, foreign coin, foreign government or bank notes, net debit or credit items in transit vis-à-vis third parties and amounts reported as insurance-related assets and liabilities.
          5 Claims, other exposures, and liabilities are to be initially classified on a geographical basis according to the mailing address of the counterparty, unless the Authorised Firm is aware that the resident status of the counterparty is different from their mailing address.

          Risk transfers

          6 Information on claims on immediate borrowers that can be reallocated to the country sector where the final risk lies, i.e., the entity of ultimate risk, is to be reported by way of outward and inward risk transfers.
          7 In line with the risk reallocation principle for measuring country exposure recommended by the Basel Committee on Banking Supervision, the country of ultimate risk or where the final risk lies is defined as the country in which the guarantor of a financial claim resides or the country in which the head office of a legally dependent branch is located.
          8 Claims on separately capitalized subsidiaries can only be considered as being guaranteed by the head office if the parent has provided an explicit guarantee. Collateral may be considered as an indicator of where the final risk lies to the extent that it is recognized as a risk mitigant under the Basel Capital Accord. The following is a list of eligible collateral:
          a cash on deposit with the lending bank including certificates of deposit or comparable instruments issued by the lending bank
          b gold
          c debt securities rated by a recognised external credit assessment institution where these are:
          i. rated at least BB- when issued by sovereigns and public sector entities (PSEs) that are treated as sovereigns by the national supervisor;
          ii. rated at least BBB- when issued by other issuers (including banks and securities firms); or
          iii. rated at least A2/P3;
          d debt securities not rated by a recognised external credit assessment institution where these are:
          i. issued by a bank;
          ii. listed on a regulated exchange;
          iii. qualify as senior debt;
          iv. all other rated issues of the same seniority by the issuing bank are rated at least BBB- or A3/P3 by a recognized external credit assessment institution;
          v. the bank holding the securities as collateral has no information to suggest that the issue justifies a rating below BBB- or A3/P3 (as applicable); and
          vi. the supervisor is sufficiently confident about the market liquidity of the security;
          e equities that are included in a main index;
          f equities that are not included in a main index but are listed on a regulated exchange; and
          g Domestic or Foreign Funds where:
          i. a price for the Units is publicly quoted daily; and
          ii. the Fund is limited to investing in the instruments listed in this section
          9 If credit derivatives are used to cover the counterparty risk of financial claims in the banking book, the country of ultimate risk of these positions is defined as the country in which the counterparty to the credit derivative contract resides. However, credit derivatives, such as credit default swaps and total return swaps, that belong to the trading book of the protection buying reporting bank should only be reported under the "Derivatives" category, and all other credit derivatives should be reported as "guarantees" by the protection seller (see guarantees and other unused credit commitments below).

          Reporting of Credit derivatives
          Buy protection Sell protection
          Banking book Risk transfers Guarantees
          Trading book Derivatives Guarantees
          10 In the case of security holdings, such as credit-linked notes and other collateralised debt obligations and asset-backed securities, a "look-through" approach should be adopted and the country of ultimate risk is defined as the country where the debtor of the underlying credit, security or derivative contract resides.
          11 Note that inward and outward risk transfers are used to report transfer of risk from one sector to another sector, even when the country of the immediate borrower and the country of ultimate risk are the same. Where banks are unable to allocate outward risk by country because the protection has been purchased to cover a group, e.g., an industry exposure, banks are to use a reasonable weighted-average allocation formula, eg. weighted-average based on total claims of the group. Amounts involved in such allocations should be insignificant.

          Example:

          12 The following example demonstrates a risk transfer. A borrower in country XXX borrows USD $1 million bank and the repayment of that loan is guaranteed by another entity in country YYY. For purposes of risk transfer, this transaction would be reported as follows:

          Country Code Loans Outward Risk Transfer Inward Risk Transfer
          XXX 1000 1000  
          YYY     1000
          13 The data in line 1 tell us that the bank has a $1 million claim on a borrower located in country XXX, and this claim is guaranteed by a resident of another country. Line 2 data tell us that the residents of country YYY have provided an unconditional credit commitment for the claims the bank has on the residents of another country. Note that the total of the "Outward Risk Transfer" column and the "Inward Risk Transfer" column (columns 3 and 4 in the above example) will be the same.
          14 The following equation illustrates how to derive claims on an ultimate risk basis:
          Total Claims (Immediate Borrower Basis) - Outward Risk Transfer + Inward Risk Transfer = Total Claims (Ultimate Risk Basis)

          Derivatives

          15 Authorised Firms are to provide data on financial claims (i.e., positive market values) resulting from derivative contracts, independent of whether they are booked as on- or off-balance sheet items. The data should be reported on an ultimate risk basis, i.e., the positions should be allocated to the country where the final risk lies. The data would, therefore, mainly comprise forwards, swaps and options relating to foreign exchange, interest rate, equity, commodity and credit derivative contracts. As previously indicated, credit derivatives that are used to cover for the counterparty risk of financial claims in the banking book should be reported as "risk transfers" and not as derivatives.
          16 The following items are common OTC derivative instruments:
          a. Forward contracts: Forward contracts represent agreements for delayed delivery of financial instruments or commodities in which the buyer agrees to purchase and the seller agrees to deliver, at a specified future date, a specified instrument or commodity at a specified price or yield. Forward contracts are not traded on organised exchanges and their contractual terms are not standardised. Forward contracts are to be reported that have been entered into by the reporting bank and are outstanding (i.e., open contracts) as at the reporting date. Contracts are outstanding (i.e., open) until they have been cancelled by acquisition or delivery of the underlying financial instrument or commodity or settled in cash.
          b. Swaps: Swaps are transactions in which two parties agree to exchange payment streams based on a specified notional amount for a specified period.
          c. OTC options: Option contracts convey either the right or the obligation, depending upon whether the reporting institution is the purchaser or the writer, respectively, to buy or sell a financial instrument or commodity at a specified price up to a specified future date. OTC option contracts include all option contracts not traded on an organized exchange. These include: swaptions, i.e., options to enter into a swap contract, and contracts known as caps, floors, collars, and corridors. Options such as call features embedded in loan, securities and other on-balance-sheet assets are not to be included. Sold options are not considered a financial claim and therefore are not to be included under derivatives.

          Guarantees and Other Unused Credit Commitments

          17 Data must be supplied on exposures to the reporting bank via guarantees and unused credit commitments other than guarantees. These are to be reported on an ultimate risk basis, i.e., the positions allocated to the country where the final risk lies. Both types of data should be reported to the extent that they represent the unutilised portion of both binding contractual obligations and any other irrevocable commitments. Performance bonds and other forms of guarantee should only be reported if, in the event of the contingency occurring, the resulting claims would have an impact on total balance sheet claims. A more detailed definition of guarantees and other credit commitments and a non-exhaustive list of typical instruments that qualify as guarantees and other credit commitments is provided below.
          18 "Guarantees" are contingent liabilities arising from an irrevocable obligation to pay to a third-party beneficiary when a client fails to perform some contractual obligation. They include secured, bid and performance bonds, warranties and indemnities, confirmed documentary credits, irrevocable and standby letters of credit, acceptances and endorsements. Guarantees also include the contingent liabilities of the protection seller of credit derivative contracts.
          19 "Other unused credit commitments" are arrangements that irrevocably obligate an institution, at a client's request, to extend credit in the form of loans, participation in loans, lease financing receivables, mortgages, overdrafts or other loan substitutes or commitments to extend credit in the form of the purchase of loans, securities or other assets. Normally commitments involve a written contract or agreement and some form of consideration, such as a commitment fee. This definition is identical to that used in the capital adequacy return. Include customers' liability under acceptances (Assets 13 of the month-end balance sheet). Do not include such items as letters of awareness or intent, comfort letters, or similar documents.

          Specific Guidance

          Item No Item Guidance
          12.1 Country Code For the relevant exposure, enter the country code found on the List of Country Codes.
          Deposits Report deposits with banks or official monetary institutions according to the location of the office where the deposit is held.
          Securities Report short term and long term securities and equities. Short term securities are those with an initial term of less than 1 year.
          Loans Report loans at book value gross of provisions for impairment.
          Distribution of claims by residual term to maturity The maturity should reflect amortisation periods or final maturity dates rather than interest adjustments or rollover dates. Instalment loans should be allocated to the periods in which instalment payments are made. Demand loans should be classified as claims with a maturity of less than one year. Equities should be reported as unallocated.


          Item No Item Guidance
          12.2 Outward Risk Transfer Report the amounts which are guaranteed or assured through some type of commitment by a party in another country or by another sector in the same country.
          Inward Risk Transfer Report the amount of any guarantees and other types of credit commitments made by residents of other countries or by another sector in the same country.
          Total Claims ultimate risk basis Report the total "claims — immediate borrower basis" less "outward risk transfers" plus "inward risk transfers".
          Other Exposures ultimate risk basis Report separate amounts for guarantees, derivatives and other as previously defined.


          Item No Item Guidance
          12.3 Official Monetary Institutions Report deposits payable to official monetary institutions.
          Other Banks Report deposits payable to other banks.
          Other Liabilities Report any other liabilities.

          List of Country Codes

          Country Country Code
          Afghanistan 648
          Albania 515
          Algeria 702
          American Samoa 832
          Andorra 403
          Angola 704
          Anguilla 274
          Antarctica 834
          Antigua and Barbuda 207
          Argentina 303
          Armenia 647
          Aruba 208
          Australia 812
          Austria 437
          Azerbaijan 649
          Bahamas 209
          Bahrain 604
          Bangladesh 650
          Barbados 212
          Belarus 517
          Belgium 406
          Belize 307
          Benin (formerly Dahomey) 724
          Bermuda 215
          Bhutan, Kingdom of 652
          Bolivia 311
          Bosnia-Hercegovina 519
          Botswana 706
          Brazil 315
          British Indian Ocean Territory 710
          British Virgin Islands 218
          Brunei 654
          Bulgaria 521
          Burkina Faso 802
          Burundi 708
          Cambodia 664
          Cameroon Republic 712
          Canada 146
          Cape Verde Islands 714
          Cayman Islands 221
          Central African Republic 716
          Chad 718
          Chile 319
          China, People's Republic of 640
          Christmas Island 840
          Cocos (Keeling) Islands 814
          Colombia 323
          Comoros Islands 720
          Congo, Democratic Republic of (formerly Zaire) 804
          Congo, People's Republic of 722
          Cook Islands 826
          Costa Rica 327
          Côte d'Ivoire 742
          Croatia 525
          Cuba 224
          Cyprus 481
          Czech Republic 526
          Denmark 409
          Djibouti (formerly French Afars & Issas) 730
          Dominica 227
          Dominican Republic 230
          Ecuador 331
          Egypt 608
          El Salvador 335
          Equatorial Guinea 726
          Eritrea 727
          Estonia 529
          Ethiopia 728
          Falkland Islands 233
          Faroe Islands 479
          Fiji 842
          Finland 441
          France 412
          French Guiana 339
          French Polynesia 844
          Gabon 732
          Gambia 734
          Georgia 657
          Germany 415
          Ghana 736
          Gibraltar 485
          Greece 445
          Greenland 480
          Grenada 236
          Guadeloupe 239
          Guam 848
          Guatemala 343
          Guernsey 486
          Guinea 738
          Guinea-Bisseau 740
          Guyana 347
          Haiti 242
          Heard and MacDonald Islands 816
          Honduras 351
          Hong Kong 658
          Hungary 539
          Iceland 449
          India 660
          Indonesia 662
          Iran 610
          Iraq 612
          Ireland 418
          Isle of Man 487
          Israel 614
          Italy 421
          Jamaica 248
          Japan 135
          Jersey 488
          Johnston Island 850
          Jordan, Hashemite Kingdom of 616
          Kazakhstan 665
          Kenya 744
          Kiribati (Canton and Enderbury, Gilbert Island, Phoenix Islands, Line Islands) 846
          Korea, Democratic People's Republic of (north) 642
          Korea, Republic of (south) 666
          Kuwait, State of 618
          Kyrgyzstan 667
          Laos 668
          Latvia 540
          Lebanon 620
          Lesotho 746
          Liberia 748
          Libya, Arab Republic of 622
          Liechtenstein 453
          Lithuania 541
          Luxembourg 424
          Macau 670
          Macedonia 542
          Madagascar (Malagasy Republic) 750
          Malawi 752
          Malaysia 672
          Maldives, Republic of 674
          Mali 754
          Malta 489
          Marshall Islands 872
          Martinique 257
          Mauritania 756
          Mauritius 758
          Mexico 355
          Micronesia 874
          Midway Island 852
          Moldova 543
          Monaco 427
          Mongolia 644
          Montserrat 260
          Morocco 760
          Mozambique 762
          Myanmar (formerly Burma) 656
          Namibia 764
          Nauru 818
          Nepal, Kingdom of 676
          Netherlands 430
          Netherlands Antilles 263
          New Caledonia 854
          New Zealand 824
          Nicaragua 359
          Niger 766
          Nigeria 768
          Niue Island 828
          Norfolk Island 820
          Norway 457
          Oman 626
          Pacific Islands (Trust Territory) 858
          Pakistan 678
          Palau 876
          Palestinian Territory 627
          Panama 363
          Panama Canal Zone 367
          Papua New Guinea 822
          Paraguay 371
          Peru 375
          Philippines 680
          Pitcairn Islands 860
          Poland 545
          Portugal 461
          Puerto Rico 202
          Qatar 628
          Reunion Islands 770
          Romania 551
          Russian Federation 553
          Rwanda 774
          Samoa 870
          San Marino 491
          Sao Tomé and Principe 778
          Saudi Arabia 630
          Senegal 780
          Serbia and Montenegro 554
          Seychelles 782
          Sierra Leone 784
          Sikkim 684
          Singapore 686
          Slovak Republic 552
          Slovenia 555
          Solomon Islands 836
          Somalia 786
          South Africa 701
          Spain 465
          Sri Lanka 688
          St. Helena 776
          St. Kitts-Nevis 272
          St. Lucia 275
          St. Pierre and Miquelon 278
          St. Vincent 281
          Sudan 790
          Suriname 379
          Swaziland 792
          Sweden 469
          Switzerland 473
          Syria 632
          Taiwan 690
          Tajikistan 691
          Tanzania 794
          Thailand 692
          Timor Leste 682
          Togo 796
          Tokelau or Union Islands 830
          Tonga 862
          Trinidad and Tobago 287
          Tunisia 798
          Turkey 477
          Turkmenistan 693
          Turks and Caicos Islands 290
          Tuvalu 838
          U.S. Miscellaneous 864
          U.S. Virgin Islands 205
          Uganda 800
          Ukraine 556
          United Arab Emirates 634
          United Kingdom 124
          United States 110
          Uruguay 383
          Uzbekistan 695
          Vanuatu (formerly New Hebridges) 856
          Vatican 433
          Venezuela 387
          Vietnam 646
          Wake Island 866
          Wallis and Futuna Islands 868
          Western Sahara 788
          Yemen, Republic of 636
          Zambia 806
          Zimbabwe (formerly Rhodesia) 772

        • PRU 2.2.25 Guidance for form PIB 13 — Provisions for Impairment

          Instructional guidelines

          Authorised Firms in category 1 and 5 are required to complete this form. All entries are to be converted from the relevant currency to US dollars at the closing spot mid price on the reporting date.

          Specific Guidance

          Item No Item Guidance
          13.1 Opening Balance Report the provisions as at the end of the previous period.
          13.2 Charge from Profit and Loss The additional provisions that management considers adequate to reduce the recorded investment in the firm's books net of other movements. The amount of provisions should be the same as recorded on the profit and loss statement.
          13.3 Write offs The reduction of provisions due to a write off of the corresponding investment.
          13.4 Recoveries The increase of provisions due to funds recovered from an investment that had previously been written off.
          13.5 Other Include and specify any other credit related adjustments to provisions occurring during the period.
          13.6 Closing Balance Report the provisions as at the end of the current period. This amount should be the opening balance adjusted by the items in 13.2, 13.3, 13.4 and 13.5. (13.1+13.2-13.3+13.4+13.5)

        • PRU 2.2.26 Guidance for form PIB 14 — Exposures in Arrears

          1. Authorised Firms in category 1 and 5 are required to complete this form in respect of its exposures in arrears. All entries are to be converted from the relevant currency to US dollars at the closing spot mid price on the reporting date.
          2. The Amount should be the total of the exposures corresponding to the time in arrears from the day on which the payment for the exposure was due as per the contractually agreed terms. The Amount should be gross of any provisions for impairment.
          3. The number of exposures should be the total number of exposures corresponding to relevant amount.
          4. The provision applied should be the specific provision applied to the relevant amount.

        • PRU 2.2.27 Instructional Guidelines for Form PIB100 — Statement of Financial Group Capital Adequacy.

          Instructional Guidelines

          1. An Authorised Firm that is required to prepare a Financial Group Capital Adequacy Report may use this form to submit that Report. Use of this form is not mandatory.
          2. Where an Authorised Firm chooses to use form PIB100 for its Financial Group Capital Adequacy Report, it must do so in accordance with the instructional guidelines in this section.
          3. An Authorised Firm completing this form must present:
          a. in the header portion of the Form the information required by PIB Rule A7.2.2(2)(a), (b) and (c);
          b. at item 1, the Financial Group Capital Resources;
          c. at item 2, the Financial Group Capital Requirement
          4. An Authorised Firm completing this form must present at item 4:
          a. the names of all Authorised Firms and Financial Institutions in the Financial Group; and
          b. where an entity disclosed at (a) is itself the Parent of a Financial Group, the Financial Group Capital Resources of that group at column 1, and the Financial Group Capital Requirement of that group at column 2.
          5. Where an entity is disclosed in accordance with instructional guideline 5(a) is not the Parent of a Financial Group, the entries at columns 1 and 2 of item 4 must be left blank.
          6. An Authorised Firm completing this form must present at item 5:
          a. the names of all Authorised Firms and Financial Institutions meeting the conditions set out at PIB Rule A7.2.2(2)(i);
          b. in column 1, the Capital Resources or Adjusted Capital Resources as applicable of that entity; and
          c. in column 2, the capital requirement of that entity calculated in accordance with PIB Rule A7.2.2 (4).
          7. Where the space on the form is inadequate for the disclosures required at item 4 or item 5, the Authorised Firm completing the form must attach a continuation sheet in the form of PIB100. Separate continuation sheets must be used for disclosures required at items 4 and 5. Continuation sheets must be sequentially numbered and each continuation sheet must be completed in accordance with the Rules applicable to items 4 and 5.
          8. At each of item 4 and item 5, the Authorised Firm completing the form must indicate whether or not a continuation sheet is attached, and if so the number of such continuation sheets.
          9. Form PIB100 must be signed in accordance with PIB Rule A7.2.2 (4).

    • PRU 3 PRU 3 Instructional Guidelines

      • PRU 3.1 PRU 3.1 PIN 1 — Statement of Financial Position

        • Instructional Guidelines

          1. The 'Statement of Financial Position' provides the DFSA with the necessary information on assets, liabilities and capital to undertake an assessment of an Insurer's financial position and performance and facilitate assessing compliance with the Minimum Capital Requirements.
          2. section PIN 5.3 deals with the recognition and measurement of assets and liabilities on this form.
          3. The instructional guidelines in this section provide instructions as to the completion of specific lines on the form. Instructions that are provided in respect of a particular category of current assets or liabilities are normally applicable also (with the appropriate changes) to the corresponding category of non-current assets or liabilities, and vice versa.
          4. The completion of this form requires Insurers to make estimates, for example, in assigning assets and liabilities as current or non-current. As an example, the settlement date of outstanding claims, particularly IBNR, is often uncertain. An Insurer may make a reasonable estimate of the amount that is expected to be settled within twelve months, and record that amount as a current liability, with the balance being recorded as non-current. A similar approach would be acceptable for the assets representing reinsurance and other recoveries that would not normally become due and receivable until the underlying claim has been settled.
          5. Insurers are required to disclose the amount included in certain totals with respect to parties Related to the Insurer. These disclosures exclude amounts due to or from the Insurer under Contracts of Insurance.
          6. This form is required for each reporting unit in respect of which the Insurer must prepare a Return, except for a DIFC Business Return.
          7. Assets and liabilities must be reported as current or non-current. Current assets and liabilities are those expected to mature or be realised within a twelve-month period from the date as at which the Return is drawn up. Where an asset or a liability includes elements that are current as well as elements that are non-current, the asset or liability must be separated into the current and non-current components, if necessary by means of an estimate.
          Item No. Item Instructional Guidelines
          1. Cash and liquid assets Item 1 on the form includes only cash and liquid assets. Insurers must have regard to the following principles:
          a Item 1.2 includes only deposits available within 24 hours that are used by the Insurer for daily purposes of liquidity and operations. Deposits that form part of the Insurer's investments are reported at item 3 or item 7; and
          b Bank overdrafts must be reported at item 21.3, not netted against item 1 unless there is a legal right of offset.
          2. Receivables Item 2 on the form includes only receivables. In completing this item, Insurers must have regard to the following principles:
          a Receivables must be stated net of any provision for doubtful debt or impairment of asset;
          b Item 2.2 includes items such as subrogation or salvage recoveries in respect of claims that have been paid;
          c Item 2.3 includes instalment premiums on General Insurance contracts that are not yet due for payment. It also includes premiums on General Insurance contracts that have been entered into but not yet recorded. It does not include premiums on Long-term Insurance contracts that are not yet due for payment;
          d Item 2.4 includes amounts due and receivable under reinsurance contracts, including premiums due from cedants and deposits retained by cedants, as well as amounts due from reinsurers in respect of recoveries against claims that have been paid. Where there is a legal right of set-off, an Insurer may report the working balance on an account with a cedant or reinsurer as a net receivable or payable amount. However, if there is no legal right of set-off, amounts must be recorded gross as receivables and payables;
          e Item 2.5 includes amounts in respect of reinsurance and other recoveries in respect of claims that have been incurred but not paid, up to the date to which the Return is drawn up. This includes reinsurance and other recoveries in respect of IBNR. Because of the uncertainty of the outcome of outstanding claims and IBNR, it is necessary to estimate at least a part of this balance. The basis on which the estimate is made must be consistent with the basis of estimation of the related liability, reported at item 18;
          f Reinsurance and other recoveries in respect of claims that have not yet been incurred are reported at item 2.6. It is necessary to estimate this balance. The basis on which the estimate is made must be consistent with the basis of estimation of the related liability, reported at item 19; and
          g Where, in determining the amounts to be reported at item 2.4 or 2.5, an Insurer has made or considered making a provision for doubtful debt in respect of recoveries due or potentially due from a reinsurer, the Insurer must take into account the potential need to make a provision when determining any estimate to be included at item 2.5 or 2.6.

          It is common practice for Insurers to account for their exposures on General Insurance contracts in force by means of an unearned premium provision, an asset representing deferred reinsurance expense and (where necessary) a premium deficiency reserve. Insurers are referred to the instructional guidelines to item 19. An Insurer that uses an unearned premium provision and premium deficiency reserve as a proxy for Premium Liabilities may record its deferred reinsurance expense at item 2.6 (for the current portion) and item 7.6 (for the non-current portion).
          3. Investments An Insurer's current investments are reported at item 3. This item does not include derivatives used to hedge investments reported here. Hedging derivatives are included in item 5. Insurers must have regard to the following principles when completing item 3:
          a Investments that are strategic in nature must be assumed to be noncurrent, and must be reported at item 8 or item 9; and
          b Deposits that are of the nature of security deposits, or retentions under contracts, are not reported at item 3.1 but are reported as receivables.

          Investments that take the form of mudaraba or musharaka contracts must be reported in accordance with their nature. A contract that takes the form of a collective investment, where the Insurer is one of several investors providing capital to a mudarib who then provides the capital to the entrepreneur, should be reported as a collective investment (where it does not fall to be reported as a Profit Sharing Investment Account). Where however, a contract of mudaraba or musharaka is entered into by an Insurer as an investment directly with an entrepreneur, or through a mudarib with the Insurer as sole rab ul mal, the investment should be reported as a contract of mudaraba or musharaka as appropriate.
          4. Deferred Tax assets Deferred tax assets that are current assets are reported at item 4. Insurers must have regard to the following principles when completing item 4:
          a Netting off of deferred tax assets and liabilities is permitted only where both the asset and the liability relate to the same tax to which the Insurer is subject, and are expected to crystallise in the same taxation period; and
          b Amounts that represent refunds due from taxation authorities, that are not contingent on earning future taxable income, are not deferred tax assets but are receivables.
          5. Other Current Assets Item 5 includes current assets that do not fall to be reported under other items. In completing this item, Insurers must have regard to the following principles:
          a Acquisition costs in respect of General Insurance business must not be deferred, as the basis on which the premium liability is determined requires immediate expensing of acquisition costs; and
          b Item 5.2 does not include deferred reinsurance expense, as item 2.6 stands in place of this asset.
          6. Total Current Assets Item 6.1 reports the total of amounts due from, balances with or investments in Related parties that form a part of the total of current assets. This amount excludes amounts due under insurance contracts.
          7. Receivables
          (non current)
          In completing item 7 (non-current receivables) Insurers should have regard to the principles set out in this section for the equivalent categories of current assets.
          8. Investments (other than related entities) In completing item 8 (non-current investments) Insurers should have regard to the principles set out in this section for the equivalent categories of current assets.
          9. Investments in related entities In item 9, investments in Related parties must be recognised and measured in accordance with the principles of chapter PIN 5. PIN Rule 5.7 requires an Insurer to make allowance for any Minimum Capital Requirement or equivalent to which a Subsidiary or Associate is subject in the jurisdiction in which it is incorporated.
          10. Plant and equipment In item 10, an Insurer must exclude any properties of the Insurer, whether or not occupied. Properties must be reported at item 3.6 or 8.6 as appropriate.
          11. Intangible assets In item 11, an Insurer must report intangible assets after deducting any amortisation or impairment charge in respect of those assets.
          12. Deferred tax assets In completing item 12 (non-current deferred tax assets) Insurers should have regard to the principles set out in this section for the equivalent categories of current assets.
          13. Other Assets In completing item 13 (other non-current assets) Insurers should have regard to the principles set out in this section for the equivalent categories of current assets.
          14. Total Non-current assets Item 14.1 reports the total of amounts due from, balances with or investments in Related parties that form a part of the total of current assets. This amount excludes amounts due under insurance contracts.
          15. Total Assets  
          16. Creditors and accruals  
          17. Amounts due on reinsurance contracts Amounts due under reinsurance contracts at item 17 must include premiums payable but not yet due for payment under the terms of reinsurance contracts, and deposits withheld from reinsurers. Other items attributable to reinsurance contracts such as the reinsurer's portion of recoveries and salvage and commissions due to reinsurers must also be included under this item.
          18. Outstanding Claims Provision (including IBNR) Item 18 reports the current portion of the Insurer's provision for outstanding claims. This item must be completed having regard to the following principles:
          a The liability must represent the estimated cost to the Insurer of settling claims which it has incurred at the reporting date but which have not been finalised. The liability is in respect of both direct business and inward reinsurance business and must take into account unpaid claims, unreported claims, adjustments for claims development and the direct and indirect claims settlement costs that the Insurer expects to incur in settling its outstanding claims;
          b In the case of Long-Term Insurance Business, this item must include all claims liabilities in respect of Contracts of Insurance that are no longer included in the calculation of the net policy benefits at item 20;
          c The liability must be stated without deducting reinsurance and other recoveries (these are disclosed as an asset as reinsurance receivables);
          d The requirements for recognition and measurement of this liability are set out in PIN Rule 5.4 and PIN Rule 5.6; and
          e The liability does not include any amounts for catastrophe reserve, equalisation reserve or similar provisions that an Insurer may be required to maintain to satisfy regulatory requirements in a jurisdiction other than the DIFC.
          19. Premium liabilities under General Insurance contracts Item 19, Premium Liability, represents the current portion of the cost of providing insurance service over the unexpired period of general insurance contracts in force at the balance date. This item must be completed having regard to the following principles:
          a The Premium Liability reported is required to cover the value of future claims payments and associated direct and indirect settlement costs arising during the unexpired portion of the contracts in question.
          b Item 19 must be recorded without deducting reinsurance and other recoveries (these are disclosed as an asset as reinsurance receivables); and
          c The requirements for recognition and measurement of this liability are set out in PIN Rule 5.4.

          As stated in the Guidance to PIN Rule 5.4.7, it is common practice for Insurers to account for their exposures on General Insurance contracts in force by means of an unearned premium provision and (where necessary) a premium deficiency reserve. Where the aggregate of the unearned premium provision and the premium deficiency reserve (both gross of reinsurance) can be shown to be not less than the amount of Premium Liability determined in accordance with PIN Rule 5.4, an Insurer may use that aggregate as a proxy for Premium Liability for the purposes of recording items 19 and 29 on this form.
          20. Net policy benefits under Long-Term insurance contracts in force Item 20 represents the net value of future Policy Benefits under Long-Term Insurance contracts that are in force as at the date to which the Return is made up. The amount reported here must be determined in accordance with PIN Rule 5.6.
          21. Borrowings  
          22. Tax liability  
          23. Provisions Item 23, provisions, must be completed having regard to the following principles:
          a A provision must be made at item 23.1 in respect of dividends payable out of past and current year profit, to the extent that profit has been recognised;
          b Employee entitlements at item 23.2 include annual leave, gratuity, accrued allowances, staff housing and loan benefits, healthcare, pension and other employee entitlements; and
          c A provision must be made at item 23.3 in respect of any costs that the Insurer expects to incur as a result of restructuring, including severance, termination and redundancy payments, and integration costs.
          24. Other Liabilities  
          25. Total Current Liabilities Item 25.1 reports the amount of current liabilities representing amounts due to Related parties, other than amounts due under insurance contracts.
          26. Creditors and accruals In completing item 26, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          27. Amounts due on reinsurance contracts In completing item 27, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          28. Outstanding Claims Provision (including IBNR) In completing item 28, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          29. Premium liabilities under General Insurance contracts In completing item 29, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          30. Net policy benefits under Long-Term Insurance contracts in force In completing item 30, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          31. Borrowings In completing item 31, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          32. Tax liability In completing item 32, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          33. Provisions In completing item 33, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          34. Other Liabilities In completing item 34, Insurers should have regard to the principles set out in these instructional guidelines for the equivalent categories of current liabilities.
          35. Loan capital and hybrid securities Item 35 includes all loan capital and hybrid securities that have been issued by the Insurer and have a residual term to maturity of more than one year. Any loan capital or hybrid securities that have a residual term to maturity of less than one year should be reported as borrowings, at item 21.
          36. Total Non-Current Liabilities Item 36.1 reports the amount of non-current liabilities representing amounts due to Related parties, other than amounts due under insurance contracts and amounts reported at line 35.
          Item 36.2 reports the amount reported at item 35 representing interests of Related parties in loan capital or hybrid securities issued by the Insurer.
          37. Total Liabilities  
          38. Net assets  
          39. Equity In completing item 39, Equity, Insurers must have regard to the following principles:
          a Item 39.7 must be equal to item 38;
          b Hybrid securities and loan capital are reported at item 35, not item 39;
          c Item 3.19 is not used in a Fund Return;
          d Item 39.3 is used only in a Fund Return, to record amounts of capital transferred into the Long-Term Insurance Fund; and
          e Where an Insurer makes use of item 39.6, the Insurer must state in a Supplementary Note the nature of the amount recorded at this item.

          Insurers must record at item 39.8 the amount included at item 39.1 meeting the following descriptions:
          a in the case of a Global Return of an Insurer that is not a Protected Cell Company, the amount of ordinary share capital meeting the description at PIN Rule A3.5.1(d);
          b in the case of a Global Return of an Insurer that is a Protected Cell Company, the amount of ordinary share capital meeting the description at PIN Rule A5.5.1(e); and
          c in the case of a Cell Return, the amount of ordinary share capital meeting the description at PIN Rule A5.10.1(d).

          No amount must be recorded at item 39.8 in the case of a Fund Return.

          An Insurer must provide the following information in a Supplementary Note to this form:
          a any amount included in item 39.7 that is not available to meet the Insurance Liabilities of the Insurer;
          b the amount and details of any guarantees (apart from guarantees arising under Contracts of Insurance) given by the Insurer;
          c the amount and details of any contingent liabilities existing as at the date to which the Return is made up; and
          d where the amount of item 39.4 is not equal to the sum of items 39.4 and 39.5 for the comparative reporting period, a reconciliation of the differences. This applies only when the form forms a part of the Annual Regulatory Return.

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]
          [Amended] DFSA GM2/2007 (Made 5 July 2007). [VER3/08-07]

      • PRU 3.2 PRU 3.2 PIN 2 — Statement of Capital Adequacy

        • Instructional Guidelines

          1. This form summarises the capital adequacy position of the Insurer so far as concerns the reporting unit for which it is prepared (Global, Cell, or Fund).
          2. The same form is used for all types of Return, although in the calculation of the capital requirements applicable to different Insurers and to their Cells and Long-Term Insurance Funds, different terminology is used. The terms on the face of the form need to be replaced with the specific equivalent terms from the relevant section (as set out below in the interpretation table), depending on the nature of the Insurer and the type of Return.
          3. This form lists a number of adjustments to arrive at the figure to be compared to the Minimum Capital Requirement applicable to the reporting unit. The purpose of these adjustments is to remove significant anomalies that may arise due to the flexibility available to Insurers in selecting their accounting bases. Therefore, not all of these adjustments will be applicable to all Insurers. An item must not be added to the base capital figure if it is al included in the base capital figure because of the accounting basis adopted.
          4. The effect of the instructions, in line with the Rules in PIN, on the Return of a Takaful Insurer is to exclude from equity any element of equity that is not available to participate in the surpluses or deficits of the Insurance Business of the Takaful Insurer, either directly or by loan to the Insurance Fund. Loans that have been made from the Owners' Equity to the Insurance Fund are included in base capital without restriction, while amounts that are available for loan are treated as hybrid capital.
          5. This form is required for each reporting unit in respect of which the Insurer must prepare a Return, except for a DIFC Business Return.
          6. Insurers must follow the requirements of PIN chapter 4 when preparing this form.
          Item No. Item Instructional Guidelines
          1. Base capital Item 1, Base capital, represents the starting-point for the calculation of the capital resources of the Insurer to be compared to the Minimum Capital Requirement applicable to the Insurer. This item must be completed having regard to the following principles:
          a Item 1.1, Equity, must be equal to total equity reported at item 39.7 on form 1, less debt-financed equity reported at line 39.8 on form 1;
          b Item 1.2, Owners' Equity, must be equal to the amount of Owners' Equity in a Takaful Insurer that is available for loan to the Insurance Fund. It does not include any amount of loans made from Owners' Equity to the Insurance Fund and not repaid. This item applies only to Takaful Insurers;
          c Any amount recorded at item 1.3.1 must not exceed the amount recorded at item 35.1 on form 1;
          d Any amount recorded at item 1.3.2 must not exceed the amount recorded at item 35.2 on form 1;
          e Item 1.3.3 may only be used by a Takaful Insurer. This item must equal item 1.2; and
          f Item 1.3.4 may not exceed the amount of item 39.7 on form 1.
          2. Adjustments to base capital in accordance with PIN Item 2, Adjustments to base capital in accordance with PIN, must be completed having regard to the following principles:
          a Amounts referred to in item 2.1 must not be reported if those amounts are included at item 1.7;
          b Amounts referred to in item 2.2 must not be reported if those amounts are excluded from item 1.7;
          c Item 2.1.1, minority interests in subsidiaries, applies only where an Insurer excludes from its equity an amount representing minority interests in a controlled entity that is not accounted for as an investment;
          d Item 2.1.2, liability for dividends to be paid in the form of shares, applies only where an Insurer has recorded as a liability a provision for dividends that are to be paid by issuing shares. This item does not apply to a Fund Return;
          e Item 2.2.1 applies to the liability referred to in PIN Rule A3.4.3(a) and equivalent provisions in PIN Rule A5.4.3(a), PIN Rule A5.8.3(a) and PIN Rule A7.4.2(a). This item does not apply to a Fund Return;
          f Item 2.2.2 applies only to a Return of a Takaful Insurer. This item represents amounts of Owners' Equity that are not available for loan to the Insurance Fund or to participate in surpluses or deficits of the Insurance Fund;
          g Item 2.2.3 represents investments of the Insurer or by any Subsidiary of the Insurer in the base capital of the Insurer recorded at item 1.4;
          h Item 2.2.4 represents the amount of any tax on capital gains, that was not recognised as a liability on form 1, and that would be incurred by the Insurer if the investments reported on form were realised at the values shown on that form;
          i Item 2.2.5 must be equal to the amount of any deferred acquisition costs included on form 1, whether as a separate asset or as a reduction from liabilities;
          j Item 2.2.6 must be equal to the sum of items 4.3 and 12.3 on form 1;
          k Item 2.2.7 must be equal to the sum of any asset recorded on form 1 and representing the value of in-force Long-Term Insurance Business;
          l Item 2.2.8 must be equal to the sum of item 11.3 on form 1, and any other intangible assets recorded on form 1 and not otherwise excluded from base capital;
          m Item 2.2.9 applies only to a Return of a Takaful Insurer. This item represents any amount of Zakah or charity fund of a Takaful Insurer that is not otherwise excluded from base capital;
          n Item 2.2.10 is intentionally blank.
          o Item 2.2.11 must be equal to the amount reported at item 10.3 on form 1; and
          p Item 2.2.12 must record the amount of any other assets, not otherwise excluded from base capital, that are not available to meet the Insurance Liabilities of the Insurer recorded on form 1.

          Item 2 would normally be expected to include assets that are subject to mortgages or other charges, or than cannot for some other reason be realised for the benefit of policyholders.
          3. Adjusted Equity Item 3.11 may only be used with the written approval of the DFSA, to record an adjustment to the Minimum Capital Requirement that has been approved in writing by the DFSA.
          4. Hybrid Capital Adjustment Item 4.1, Hybrid Capital Adjustment before DFSA approval, must be calculated as the amount by which the sum of items 1.3.1 to 1.3.4 exceeds 15/85 of the amount arrived at by deducting item 1.2.1 from item 1.1.

          Item 4.2, additional hybrid capital approved by DFSA, may only be used to record additional amounts of hybrid capital that have been approved in writing by the DFSA, in accordance with PIN Rule A3.5.2, PIN Rule A5.5.4, PIN Rule A5.10.4 or PIN Rule A7.5.3. The amount of item 4.2 may not exceed the amount of item 4.1

          Item 4.1 deducts hybrid capital that would normally be inadmissible because it exceeds the prescribed percentage. Item 4.2 reinstates hybrid capital that had been disallowed by item 4.1. Item 4.2 does not show the total amount of admissible hybrid capital, only that portion that exceeds the 15% ceiling.
          5. Adjusted Capital Resources  
          6. Minimum Capital Requirement Item 6, Minimum Capital Requirement sets out the components of the Minimum Capital Requirement applicable to the reporting unit of the Insurer in respect of which the Return is completed. For each reporting unit, the components must be calculated in accordance with the chapter applicable to that reporting unit. The terms used in this item must be interpreted in accordance with section 3.16.
          7. Absolute minimum requirement applicable to reporting unit Item 7, Absolute minimum requirement applicable to reporting unit, must be interpreted in accordance with the interpretation table below.
          8. Applicable result  
          9. Capital adequacy result  
          7. For the purposes of this form, the meaning that must be given to each of the terms set out in the leftmost column of the interpretation table below for each type of Return is contained in the column headed by that type of Return.
          8. Where a term does not apply to a type of Return, this is denoted by the characters 'N/A' and this item must be left blank on the form.
          Meaning of term for each type of Return
          Item No. Term used in form Global Return (all Insurers except Protected Cell Companies) Global Return (Protected Cell Companies) Cell Return Fund Return
          1. Base capital Base capital as defined in PIN Rule A3.3.1 Base non-cellular capital as defined in PIN Rule A5.3.1 Base cellular capital as defined in PIN Rule A5.7.1 Base fund capital as defined in PIN Rule A7.3.2
          3. Adjusted equity AE as defined in PIN Rule A3.2.1 ANE as defined in PIN Rule A5.2.1 ACE as defined in PIN Rule A5.6.1 AFE as defined in PIN Rule A7.2.1
          4. Hybrid Capital Adjustment HCA as defined in PIN Rule A3.2.1 HNCA as defined in PIN Rule A5.2.1 HCCA as defined in PIN Rule A5.6.1 FHCA as defined in PIN Rule A7.2.1
          5. Adjusted Capital Resources ACR as defined in PIN Rule A3.2.1 ANCR as defined in PIN Rule A5.2.1 ACCR as defined in PIN Rule A5.6.1 AFCR as defined in PIN Rule A7.2.1
          6. Minimum Capital Requirement MCR as defined in PIN Rule A4.2.1 MSCR as defined in PIN Rule A6.2.2 MSCR as defined in PIN Rule A6.2.2 MFCR as defined in PIN Rule A8.2.1
          6.1 Default risk component DRC as defined in PIN Rule A4.2.1 DRC as defined in PIN Rule A6.2.2 DRC as defined in PIN Rule A6.2.2 DRC as defined in PIN Rule A8.2.1
          6.2 Investment volatility risk component IVRC as defined in PIN Rule A4.2.1 IVRC as defined in PIN Rule A6.2.2 IVRC as defined in PIN Rule A6.2.2 IVRC as defined in PIN Rule A8.2.1
          6.3 Off-balance sheet asset risk component OARC as defined in PIN Rule A4.2.1 OARC as defined in PIN Rule A6.2.2 OARC as defined in PIN Rule A6.2.2 OARC as defined in PIN Rule A8.2.1
          6.4 Off-balance sheet liability risk component OLRC as defined in PIN Rule A4.2.1 OLRC as defined in PIN Rule A6.2.2 OLRC as defined in PIN Rule A6.2.2 OLRC as defined in PIN Rule A8.2.1
          6.5 Concentration risk component CRC as defined in PIN Rule A4.2.1 CRC as defined in PIN Rule A6.2.2 CRC as defined in PIN Rule A6.2.2 CRC as defined in PIN Rule A8.2.1
          6.6 Size factor adjustment SFAC as defined in PIN Rule A4.2.1 SFAC as defined in PIN Rule A6.2.2 SFAC as defined in PIN Rule A6.2.2 SFAC as defined in PIN Rule A8.2.1
          6.7 Underwriting risk component URC as defined in PIN Rule A4.2.1 N/A URC as defined in PIN Rule A6.2.2 N/A
          6.8 Reserving risk component RRC as defined in PIN Rule A4.2.1 N/A RRC as defined in PIN Rule A6.2.2 N/A
          6.9 Long-Term Insurance risk component LIRC as defined in PIN Rule A4.2.1 N/A LIRC as defined in PIN Rule A6.2.2 LIRC as defined in PIN Rule A8.2.1
          6.10 Asset management risk component AMRC as defined in PIN Rule A4.2.1 AMRC as defined in PIN Rule A6.2.2 AMRC as defined in PIN Rule A6.2.2 AMRC as defined in PIN Rule A8.2.1
          7. Absolute minimum requirement applicable to reporting unit The amount set out in PIN Rule A4.2.3, applicable to the Insurer The amount set out in PIN Rule A6.2.4 or, if higher, the MSCR as defined in PIN Rule A6.2.2 plus any amount that must be added to that amount pursuant to PIN Rule A6.2.6 The amount set out in PIN Rule A6.2.5 The amount set out in PIN Rule A8.2.3

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]
          [Amended] DFSA GM2/2007 (Made 5 July 2007). [VER3/08-07]

      • PRU 3.3 PRU 3.3 PIN 3 — Statement of Financial Performance

        • Instructional Guidelines

          1. This form summarises the financial performance of the Insurer.
          2. This form is required for each reporting unit in respect of which the Insurer must prepare a Return, except for a DIFC Business Return.
          3. This form must agree with other forms in the Return (where those forms are prepared for the same reporting unit) in the following respects:
          a. Item 1.1 must agree to form 4 item 9 column 5;
          b. Item 1.2 must agree to form 4 item 28 column 5;
          c. Item 2.1 must agree to form 4 item 19 column 5;
          d. Item 2.2 must agree to form 4 item 37 column 5;
          e. Item 4.1 must agree to form 5 item 9 column 5;
          f. Item 4.2 must agree to form 5 item 28 column 5;
          g. Item 5.1 must agree to form 5 item 19 column 5;
          h. Item 5.2 must agree to form 5 item 37 column 5;
          i. Item 10.1 must equal the sum of items 9 and 28 in column 5 on form 8;
          j. Item 10.2 must equal the sum of items 19 and 37 in column 5 on form 8;
          k. Item 13.1 must equal item 7 minus item 6.3 on form 7; and
          l. Item 13.2 must agree to form 7 item 6.3.
          4. An Insurer must present at item 7 the amount of the movement in the period reported on in the balance of Insurance Liabilities.
          5. An Insurer must present at item 8 the amount of the movement in the period reported on in the balance of reinsurance and other recoveries in respect of Insurance Liabilities.
          6. Insurance Liabilities are reported gross of reinsurance and other recoveries. Reinsurance and other recoveries that are recorded in respect of Insurance Liabilities are reported as assets. An increase in Insurance Liabilities is reported on form 3 as an expense. In the same manner, an increase in the reinsurance and other recoveries in respect of Insurance Liabilities is recorded as revenue.
          7. The other expenses disclosed at item 10.4 must be only those attributable to a Long-Term Insurance Fund. Expenses that are not so attributable are disclosed at item 10.5. By virtue of PIN Rule 3.5.5, expenses that do not relate to the Insurer’s Long-Term Insurance Business may not be attributed to a Long-Term Insurance Fund.
          8. An Insurer must present the following information in a Supplementary Note to this form:
          a. the amount if any included in item 11.2 that represents other operating income receivable from Related parties, and a description of the nature of that income;
          b. the amount if any included in item 13.3 that represents investment expenses payable to Related parties; and
          c. where item 18 does not agree to form 1 item 39.5, a reconciliation showing the differences between the two figures.
          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]
          [Amended] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU 3.4 PRU 3.4 PIN 4 — Statement of Premium Revenue and Reinsurance Expenses

        • Instructional Guidelines

          1. This form is required for each reporting unit in respect of which the Insurer must prepare an Annual Regulatory Return, except for the Global Return of an Insurer that is a Protected Cell Company.
          2. A Protected Cell Company is prevented by COB from carrying on Insurance Business other than through a Cell. Because this form would always be blank for such a company in its Global Return, there is no need for it to submit the form or to complete a Supplementary Note to explain its absence.
          3. An Insurer must record premiums and reinsurance premiums relating to its Insurance Business on this form as follows:
          a. An Insurer that is carrying on General Insurance Business must complete part I of this form.
          b. An Insurer that is carrying on Long-Term Insurance Business must complete part II of this form.
          c. Subject to d. an Insurer that is carrying on Long-Term Insurance Business and General Insurance Business of Class 1 or Class 2 may elect either to record the General Insurance Business in part I of this form, or to include that business in Class I on part II of this form. An Insurer may not, between successive Returns, change its election without the written approval of the DFSA.
          d. A DIFC Incorporated Insurer undertaking Direct Long-Term Insurance business and General Insurance Business of Class 1 or Class 2 that is Direct business must record that General Insurance Business as Direct Long-Term Insurance Business in Class I.
          4. At items 1 to 8 and items 21 to 27, against each Class of Business, and for each type of insurance contract as set out in columns 1 to 4, an Insurer must record its Gross Written Premium for the reporting period in respect of that Class of Business and for that type of insurance contract.
          5. At items 11 to 18 and items 30 to 36, against each Class of Business, and for each type of insurance contract as set out in columns 1 to 4, an Insurer must record the reinsurance premium ceded in respect of each Class of Business and each type of insurance contract. Reinsurance premiums recorded as ceded must be gross of any commissions or brokerage, and must be recognised on a basis consistent with the recognition of Gross Written Premium on this form.
          6. Reinsurance premiums ceded must be analysed between columns 1 and 4 on the basis of the underlying insurance contracts that they are protecting, not on the basis of the reinsurance contracts themselves. Where reinsurance arrangements protect more than one type of business (for example both direct and facultative business) or more than one Class of Business, the Insurer must make a reasonable allocation of the reinsurance premiums between the types or Classes of Business covered.
          7. An Insurer must disclose the aggregate amount of its insurance and reinsurance transactions with its Related parties as follows:
          a. at item 10, the amount of Gross Written Premium accepted from Related parties that has been included in the total at item 9;
          b. at item 20, the amount of reinsurance premium ceded to Related parties that has been included in the total at item 19;
          c. at item 29, the amount of Gross Written Premium accepted from Related parties that has been included in the total at item 28; and
          d. at item 38, the amount of reinsurance premium ceded to Related parties that has been included in the total at item 37.

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]
          [Amended] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU 3.5 PRU 3.5 PIN5 — Statement of Claims and Reinsurance and other Recoveries

        • Instructional Guidelines

          1. This form is required for each reporting unit in respect of which the Insurer must prepare an Annual Regulatory Return, except for the Global Return of an Insurer that is a Protected Cell Company.
          2. A Protected Cell Company is prevented by COB from carrying on Insurance Business other than through a Cell. Because this form would always be blank for such a company in its Global Return, there is no need for it to submit the form or to complete a Supplementary Note to explain its absence.
          3. An Insurer must record claims paid and reinsurance and other recoveries in respect of claims paid relating to its Insurance Business on this form as follows:
          a. An Insurer that is carrying on General Insurance Business must complete part I of this form.
          b. An Insurer that is carrying on Long-Term Insurance Business must complete part II of this form.
          c. An Insurer that is carrying on Long-Term Insurance Business and General Insurance Business of Class 1 or Class 2 must record the General Insurance Business in a manner consistent with that adopted in respect of form 4 or determined in accordance with the instructional guidelines 3c under section 3.4.
          d. A DIFC Incorporated Insurer that carries on Direct Long-Term Insurance Business must complete part III of this form in addition to any other part that this rule requires it to complete. Part III of this form is completed in respect of Direct Long-Term Insurance Business only.
          4. At items 1 to 8 and items 21 to 27, against each Class of Business, and for each type of insurance contract as set out in columns 1 to 4, an Insurer must record its gross claims paid for the reporting period in respect of that Class of Business and for that type of insurance contract.
          5. For the purposes of this form, the amount of claims paid includes expenses incurred by the Insurer in the settlement of the claims.
          6. At items 11 to 18 and items 30 to 36, against each Class of Business, and for each type of insurance contract as set out in columns 1 to 4, an Insurer must record the reinsurance and other recoveries receivable in respect of claims paid, in respect of each Class of Business and each type of insurance contract.
          7. Reinsurance recoveries must be analysed between columns 1 and 4 on the basis of the underlying insurance contracts that they relate to, not on the basis of the reinsurance contracts themselves. Where the nature of the reinsurance contract is such that the Insurer cannot identify individual claims benefiting from the recoveries (for example, in the case of an aggregate excess of loss contract, or a stop loss contract) the Insurer must make a reasonable allocation of the recoveries across the types and Classes of Business that have benefit of the reinsurance contracts.
          8. An Insurer must disclose the aggregate amount of its insurance and reinsurance transactions with its related parties as follows:
          a. At item 10, the amount of gross claims paid to Related parties that has been included in the total at item 9;
          b. At item 20, the amount of reinsurance and other recoveries receivable from Related parties that has been included in the total at item 19;
          c. At item 29, the amount of gross claims paid to Related parties that has been included in the total at item 28; and
          d. At item 38, the amount of reinsurance and other recoveries receivable from Related parties that has been included in the total at item 37.
          9. An Insurer required to complete part III must record at items 39 to 45, against each Class of Business, and for each type of claim as set out in columns 1 to 4, the Insurer’s gross claims paid for the reporting period in respect of that Class of Business and for that type of claim.
          10. An Insurer required to complete part III must record, for each type of claim as set out in columns 1 to 4, at item 47 the amount of gross claims paid to Related parties that has been included in the total at item 46.
          11. For the purposes of this form, the amount of claims paid includes expenses incurred by the Insurer in the settlement of the claims.
          12. At items 48 to 54, against each Class of Business, and for each type of claim as set out in columns 1 to 4, an Insurer required to complete part III must record the reinsurance and other recoveries receivable in respect of claims paid, in respect of each Class of Business and each type of insurance contract.
          13. An Insurer required to complete part III must record, for each type of claim as set out in columns 1 to 4, at item 56 the amount of reinsurance and other recoveries receivable from Related parties that has been included in the total at item 55.
          14. Column 5 in part III of the form must equal column 1 in part II of the form as follows:
          a column 5, items 39 to 45 must equal column 1, items 21 to 27 respectively;
          b column 5 item 47 must equal column 1 item 29;
          c column 5, items 48 to 54 must equal column 1, items 30 to 36 respectively; and
          d column 5 item 56 must equal column 1 item 38.
          15. Part III of the form is completed only by DIFC Incorporated Insurers that undertake Direct Long-Term Insurance Business. This part provides an analysis of the information provided in column 1 of part II.

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]
          [Amended] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU 3.6 PRU 3.6 PIN6 — Statement of Movements in Insurance Provisions

        • Instructional Guidelines

          1. This form is required for each reporting unit in respect of which the Insurer prepares an Annual Regulatory Return, or a part of an Annual Regulatory Return, in respect of General Insurance Business.
          2. A Protected Cell Company is prevented by COB from carrying on Insurance Business other than through a Cell. Because this form would always be blank for such a company in its Global Return, and it is exempted from the requirement to complete other forms relating to General Insurance Business, there is no need for it to submit the form, or to complete a Supplementary Note to explain its absence.
          3. A Global Return of an Insurer that does not carry on General Insurance Business, or a Cell Return, Fund Return or DIFC Business Return of such an Insurer, also omits this form, without the need for a Supplementary Note to explain its absence. However, if an Insurer that carries on Long-Term Insurance Business together with Class 1 or Class 2 General Insurance Business elects to report that Class 1 or Class 2 business as General Insurance Business for the purposes of form 4 or form 5, it must also complete this form in respect of that business.
          4. An Insurer must record separately, in parts I to IV and parts V to VIII respectively of this form, the information required in respect of claims outstanding (including IBNR) gross of reinsurance and other recoveries, and reinsurance and other recoveries in respect of those claims outstanding. This information must be presented for each Class of Business.
          5. Reinsurance recoveries must be analysed between parts V to VIII on the basis of the underlying insurance contracts that they relate to, not on the basis of the reinsurance contracts themselves. Where the nature of the reinsurance contract is such that the Insurer cannot identify individual claims benefiting from the recoveries (for example, in the case of an aggregate excess of loss contract, or a stop loss contract) the Insurer must make a reasonable allocation of the recoveries across the types and Classes of Business that have benefit of the reinsurance contracts.

          Parts I, II, III and IV:

          6. PIN chapter 5 requires an Insurer to record its Insurance Liabilities on a discounted basis. A liability for an outstanding claim increases between the beginning and end of a reporting period, because the amount of discount applied at the later is less. The expense represented by this increase is referred to in the form as release of discount.

          Parts I, II, III and IV must be prepared on the following basis:

          a. At column 1 in each part, the Insurer must record the amount of claims outstanding (including IBNR), at the end of the reporting period and in respect of claims incurred during the reporting period;
          b. At column 2 in each part, the Insurer must record the amount of claims outstanding (including IBNR), at the beginning of the reporting period and in respect of claims incurred during the previous reporting period;
          c. At column 3 in each part, the Insurer must record the amount of the movement during the reporting period in the provision for claims outstanding (including IBNR), in respect of claims incurred during the previous reporting period, that arises from those claims being one year closer to settlement;
          d. At column 4 in each part, the Insurer must record the amount of claims paid during the reporting period, in respect of claims incurred during the previous reporting period;
          e. At column 5 in each part, the Insurer must record the amount of other movements in the provision for claims outstanding (including IBNR), in respect of claims incurred during the previous reporting period;
          f. At column 7 in each part, the Insurer must record the amount of claims outstanding (including IBNR), at the beginning of the reporting period and in respect of claims incurred before the beginning of the previous reporting period;
          g. At column 8 in each part, the Insurer must record the amount of the movement during the reporting period in the provision for claims outstanding (including IBNR), in respect of claims incurred before the beginning of the previous reporting period, that arises from those claims being one year closer to settlement;
          h. At column 9 in each part, the Insurer must record the amount of claims paid during the reporting period, in respect of claims incurred before the beginning of the previous reporting period; and
          i. At column 10 in each part, the Insurer must record the amount of other movements in the provision for claims outstanding (including IBNR), in respect of claims incurred before the beginning of the previous reporting period.

          Parts V, VI, VII and VIII

          7. chapter PIN 5 requires an Insurer to record its Insurance Liabilities and associated assets on a discounted basis. The asset representing reinsurance and other recoveries against outstanding claims increases between the beginning and end of a reporting period, because the amount of discount applied at the later is less. The revenue represented by this increase is referred to in the form as release of discount.

          Parts V, VI, VII and VIII must be prepared on the following basis:

          a. At column 1 in each part, the Insurer must record the amount of the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), at the end of the reporting period and in respect of claims incurred during the reporting period;
          b. At column 2 in each part, the Insurer must record the amount of the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), at the beginning of the reporting period and in respect of claims incurred during the previous reporting period;
          c. At column 3 in each part, the Insurer must record the amount of the movement during the reporting period in the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), in respect of claims incurred during the previous reporting period, that arises from those recoveries being one year closer to settlement;
          d. At column 4 in each part, the Insurer must record the amount of recoveries received during the reporting period, in respect of claims incurred during the previous reporting period;
          e. At column 5 in each part, the Insurer must record the amount of other movements in the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), in respect of claims incurred during the previous reporting period;
          f. At column 7 in each part, the Insurer must record the amount of the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), at the beginning of the reporting period and in respect of claims incurred before the beginning of the previous reporting period;
          g. At column 8 in each part, the Insurer must record the amount of the movement during the reporting period in the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), in respect of claims incurred before the beginning of the previous reporting period, that arises from those claims being one year closer to settlement;
          h. At column 9 in each part, the Insurer must record the amount of reinsurance and other recoveries received during the reporting period, in respect of claims incurred before the beginning of the previous reporting period; and
          i. At column 10 in each part, the Insurer must record the amount of other movements in the asset representing reinsurance and other recoveries in respect of outstanding claims (including IBNR), in respect of claims incurred before the beginning of the previous reporting period.
          8. The aggregate of items 9, 18, 27 and 36 in column 12 of this form must together equal the sum on form 1 of items 18 and 28, except in the case of a Return that does not include form 1.
          9. The aggregate of items 45, 54, 63 and 72 in column 12 of this form must together equal the sum on form 1 of items 2.5 and 7.5, except in the case of a Return that does not include form 1.
          10. An Insurer must present, as a Supplementary Note to this form, the following information:
          a the assumed inflation and discount rates, expressed as an annualised percentage, used by the Insurer in determining the amounts reported on this form, distinguishing between the rates assumed for the periods:
          i. up to two calendar years after the end of the reporting period;
          ii. more than two and up to five calendar years after the end of the reporting period; and
          iii. more than five calendar years after the end of the reporting period;
          b the basis on which those assumed inflation and discount rates were determined; and
          c the estimated weighted average term to settlement of:
          i. claims incurred in the reporting period;
          ii. claims incurred in the previous reporting period; and
          iii. claims incurred in earlier reporting periods.

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]
          [Amended] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU 3.7 PRU 3.7 PIN 7 — Statement of Investment Income

        • Instructional Guidelines

          This form is required for each reporting unit in respect of which the Insurer must prepare an Annual Regulatory Return, except for a DIFC Business Return.

          Item No. Item Instructional Guidelines
          1. Interest receivable The Insurer must disclose at item 1 interest receivable, measured on an accruals basis, on securities and loans bearing a fixed or variable rate of interest. This item should include interest receivable on cumulative preference shares
          2. Dividends receivable The Insurer must disclose at item 2 dividends receivable on equity Securities
          3. Rental income receivable The Insurer must disclose at item 3 rental income receivable, on an accruals basis, for the use of real property
          4. Income under investment contracts of mudaraba and musharaka The Insurer must disclose at item 4 income receivable, on an accruals basis, under investment contracts of mudaraba and musharaka other than Profit Sharing Investment Accounts or contracts of the nature of collective investments;
          Item 4 should include income receivable under contracts of mudaraba and musharaka where the nature of the investment is that the Insurer provides capital to the counterparty either directly or through a mudarib, but not in the form of a Profit Sharing Investment Account (PSIA), mutual fund or other collective investment. Collective investments including PSIAs are disclosed at item 5
          5. Income from collective investments The Insurer must disclose at item 5 income receivable, on an accruals basis, from collective investments, including mutual funds, Profit Sharing Investment Accounts and contracts taking the form of collective investments;

          Item 5 should include income receivable under contracts that by their nature are collective investments, where the Insurer stands as one of several rab ul mal providing capital to a mudarib who in turn invests that capital. The rab ul mal may receive a Sukuk or certificate which may be transferable. Investments in Profit Sharing Investment Accounts will normally be disclosed here.
          6. Changes in value in invested assets The Insurer must disclose at item 6 the aggregate amount of changes in value in its invested assets. Where the aggregate amount of changes in value for either of item 6.1 or 6.2 represents a reduction in value, the Insurer must record that item as a negative figure
          7. Other investment income The Insurer must disclose at item 7 the aggregate amount of any investment income that does not fall into any of items 1 to 5. Where an Insurer uses this item, it must provide details of the item in question in a Supplementary Note to this form.

          Item 7 will normally be used only by Insurers with income on investments that do not readily fall into any of the categories described in this Rule. An Insurer reporting an amount under this item will normally be expected to provide sufficient information to explain to the DFSA the nature of the investment and the nature of the income arising from it.
          8. Total investment income  

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.8 PRU 3.8 PIN 8 — Statement of Acquisition Expenses

        • Instructional Guidelines

          1. This form is required for each reporting unit in respect of which the Insurer must prepare an Annual Regulatory Return, except for the Global Return of an Insurer that is a Protected Cell Company.
          2. A Protected Cell Company is prevented by COB from carrying on Insurance Business other than through a Cell. Because this form would always be blank for such a company in its Global Return, there is no need for it to submit the form or to complete a Supplementary Note to explain its absence.
          3. An Insurer must record acquisition expenses relating to its Insurance Business on this form as follows:
          a. An Insurer that is carrying on General Insurance Business must complete part I of this form;
          b. An Insurer that is carrying on Long-Term Insurance Business must complete part II of this form;
          c. An Insurer that is carrying on Long-Term Insurance Business and General Insurance Business of Class 1 or Class 2 must record that business consistently with the election made pursuant to form 5;
          d. A DIFC Incorporated Insurer that carries on Direct Long-Term Insurance Business must complete part III of this form in addition to any other part that this rule requires it to complete. Part III of this form is completed in respect of Direct Long-Term Insurance Business only; and
          e. Commissions receivable by Insurers from their reinsurers (often referred to as exchange commissions, overriders or ceded acquisition costs) must not be netted against acquisition costs disclosed on this form but must be recorded as income on form 3 at item 11.1.
          4. Part III only of this form provides additional disclosures in respect of expenses recovered from reinsurers, in the case of Direct Long-Term Insurance Business. Those disclosures are not limited to commissions.
          5. At items 1 to 8 and items 21 to 27, against each Class of Business, and for each type of insurance contract as set out in columns 1 to 4, an Insurer must record commissions and brokerage payable by it for the reporting period in respect of that Class of Business and for that type of insurance contract.
          6. At items 11 to 18 and items 30 to 36, against each Class of Business, and for each type of insurance contract as set out in columns 1 to 4, an Insurer must record acquisition expenses other than commission and brokerage payable by it in respect of each Class of Business and each type of insurance contract.
          7. An Insurer must disclose the aggregate amount of acquisition costs payable to related parties as follows:
          a. at item 10, the amount of commissions and brokerage payable to Related parties that has been included in the total at item 9;
          b. at item 20, the amount of other acquisition expenses payable to related parties that has been included in the total at item 19;
          c. at item 29, the amount of commissions and brokerage payable to related parties that has been included in the total at item 28; and
          d. at item 38, the amount of other acquisition expenses payable to related parties that has been included in the total at item 37.
          8. An Insurer required to complete part III must record at items 39 to 45, against each Class of Business, and for each type of expense as set out in columns 1 to 4, the Insurer’s commission and management expenses paid for the reporting period in respect of that Class of Business and for that type of expense.
          9. At item 47, an Insurer required to complete part III must record the amount of each type of expense as set out in columns 1 to 4 and included in item 46 that is payable to Related parties.
          10. At item 48, an Insurer required to complete part III must record the amount of each type of expense as set out in columns 1 to 4 and included in item 46 that is recoverable from reinsurers.
          11. At item 49, an Insurer required to complete part III must record the amount of each type of expense as set out in columns 1 to 4 and included in item 46 that is recoverable from Related parties. Where amounts are disclosed here that are not included in item 48, particulars of the recovery must be disclosed in a Supplementary Note.
          12. Column 1, items 39 to 45 must equal column 1, items 21 to 27 respectively and column 1 item 47 must equal column 1 item 29.
          13. Column 2, items 39 to 45 must equal column 1, items 30 to 36 respectively and column 2 item 47 must equal column 1 line 38.
          14. An Insurer must present by way of Supplementary Note a reconciliation between the sum of item 46 column 3 and item 46 column 4, and item 10.4 in the current year column of Form PIN3.
          15. An Insurer must present by way of Supplementary Note a description of the method by which management expenses have been allocated between columns 2, 3 and 4 of part III.
          16. This part of the form is completed only by DIFC Incorporated Insurers that undertake Direct Long-Term Insurance Business. This part provides an analysis of the information provided in column 1 of part II, with additional information on management expenses not disclosed elsewhere on this form.
          17. In allocating management expenses between columns 2, 3 and 4, Insurers should follow generally accepted practice in the life insurance industry. Costs that are not attributable to the Direct Long-Term Insurance Business will not be included on this form as by virtue of PIN Rule 3.5.5 they may not be paid out of the Long-Term Insurance Fund. In general, an Insurer should observe the following principles when making the allocation:
          a. Acquisition costs include those incurred in writing new business or amendments to existing business, such as underwriting, issue of contracts, and setting up policy records. Expenses attributable to the sales and marketing organisation also fall within this heading.
          b. Maintenance costs include those incurred in maintaining the business, for example the cost of issuing periodic reports to policyholders and investment management expenses.
          c. Costs of a non-recurring nature should be recorded as ‘other’. Costs of this nature include the costs of establishing an operation or developing new systems.
          18. The Supplementary Note required by instructional guideline 14 in this section should provide particulars of reconciling items. Where the only difference between the two figures is management expenses attributable to Long-Term Insurance Business other than Direct, no further explanation is required.

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]
          [Amended] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU 3.9 PRU 3.9 PIN9 — Reconciliation to Financial Statements

        • Instructional Guidelines

          1. This form is required only for an Insurer's Global Return. This form is not subject to audit.
          2. The purpose of this for is to provide a reconciliation between the net assets of the Insurer as recorded on form 1 and the net assets of the Insurer as recorded in its financial statements prepared under relevant companies legislation for the same reporting period.
          3. Where an Insurer's financial statements prepared under relevant companies legislation are not available at the time of lodgement of the Annual Regulatory Return, the Insurer will be expected to complete this form based on the draft financial position of the Insurer as at the end of the reporting period. Where the financial statements are subsequently provided to the DFSA as permitted by PIN Rule 6.5.7, the Insurer should consider whether it is necessary to draw the attention of the DFSA to any significant changes between the draft financial statements on which this form was based and the financial statements subsequently provided.
          4. An Insurer must disclose the amounts making up the difference between the Insurer's net assets reported at item 39.7 on form 1 and the Insurer's net assets (or equivalent designation) reported on the balance sheet, statement of financial position or equivalent document (referred to in this section as the 'statutory balance sheet') forming part of the financial statements that the Insurer is required to complete under the Companies Law 2004 (or equivalent legislation in jurisdictions other than the DIFC), made up as at the same date as the information contained in form 1.
          Item No. Item Instructional Guidelines
          1. Net assets according to Form 1 item 39.7 Item 1 must agree to form 1 item 39.7.
          2. Differences between item 1 and Net Assets according to Financial Statements Differences constituting differences in recognition of assets and liabilities must be disclosed at item 2.1. Where an asset is recognised in the statutory balance sheet but not in form 1, the item must be disclosed as a positive amount, and vice versa. Where a liability is recognised in the statutory balance sheet but not in form 1, the item must be disclosed as a negative amount, and vice versa.

          Differences constituting differences in valuation of assets and liabilities that are recognised in both the statutory balance sheet and form 1 must be disclosed at item 2.2. Where an asset is valued at more in the statutory balance sheet than in form 1, the item must be disclosed as a positive amount, and vice versa. Where a liability is valued at more in the statutory balance sheet than in form 1, the item must be disclosed as a negative amount, and vice versa.

          The information presented at items 2.1 and 2.2 must include:
          a. the amount of each material difference; and
          b. a description of each material difference.
          3. Net Assets according to Financial Statements Item 3 must agree to the amount of net assets (or equivalent designation) in the Insurer's statutory balance sheet.
          5. Where this form does not contain sufficient space for the presentation of the information required by this section, the Insurer must present a Supplementary Note containing that information.
          6. Presenting a Supplementary Note does not relieve an Insurer from the obligation to prepare the form. However it will be acceptable for an Insurer to include on the form a reference to the Supplementary Note containing the information required to be presented, together with the aggregate amount covered in that Supplementary Note.

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.10 PRU 3.10 PIN10 — Summary Statement to Operations

        • Instructional Guidelines

          1. This form is required only for a DIFC Business Return.
          2. The Summary statement of operations provides the DFSA with quarterly information on the operations of a DIFC Branch of an Insurer that is not incorporated in the DIFC.
          3. The instructional guidelines in this section provide instructions as to the completion of specific lines on the form. The instructions are similar to those applicable to corresponding items on forms 1 and 3, which are not applicable to DIFC Business Returns.
          4. On this form, reinsurance premiums and reinsurance recoveries refer to amounts ceded and recovered in respect of insurance contracts entered into as part of the Insurer's DIFC Insurance Business, regardless of where the reinsurance premiums and reinsurance recoveries are payable or receivable.
          Item No. Item Instructional Guidelines
          1. Gross Written Premiums An Insurer must present at item 1 the amount of its Gross Written Premium in respect of its business conducted in the DIFC.
          2. Reinsurance Premiums Ceded An Insurer must present at item 2 the amount of reinsurance premium ceded in respect of insurance contracts whose Gross Written Premium is recorded at item 1.
          3. Net written premiums  
          4. Claims paid An Insurer must present at item 4 the amount of claims paid in respect of its business conducted in the DIFC.
          5. Reinsurance and other recoveries received An Insurer must present at item 5 the amount of reinsurance and other recoveries receivable in respect of claims recorded at item 4.
          6. Net claims paid  
          7. Movements in Insurance Liabilities (gross) An Insurer must present at item 7 the amount of the movement in the period reported on in the balance of Insurance Liabilities.
          8. Movements in recoveries against Insurance Liabilities An Insurer must present at item 8 the amount of the movement in the period reported on in the balance of reinsurance and other recoveries in respect of Insurance Liabilities.

          Insurance Liabilities are reported gross of reinsurance and other recoveries. Reinsurance and other recoveries that are recorded in respect of Insurance Liabilities are reported as assets. An increase in Insurance Liabilities is reported on form 10 as an expense. In the same manner, an increase in the reinsurance and other recoveries in respect of Insurance Liabilities is recorded as revenue.
          9. Net movement in provisions  
          10. Expenses  
          11. Other operating revenue Where an Insurer reports any amount at item 11.2, the Insurer must present in a Supplementary Note the amount of any such income receivable from Related parties, and a description of the nature of that income.
          12. Operating income  
          13. Outstanding Claims Provision (including IBNR) Item 13 reports the Insurer's provision for outstanding claims. This item must be completed having regard to the following principles:
          a The liability must represent the estimated cost to the Insurer of settling claims which it has incurred at the reporting date but which have not been finalised. The liability is in respect of both direct business and inward reinsurance business and must take into account unpaid claims, unreported claims, adjustments for claims development and the direct and indirect claims settlement costs that the Insurer expects to incur in settling its outstanding claims;
          b In the case of Long-Term Insurance Business, this item must include all claims liabilities in respect of Contracts of Insurance that are no longer included in the calculation of the net policy benefits at item 17;
          c The liability must be stated without deducting reinsurance and other recoveries (these are disclosed as an asset as reinsurance receivables);
          d The requirements for recognition and measurement of this liability are set out in PIN Rule 5.4 and PIN Rule 5.6; and
          e The liability does not include any amounts for catastrophe reserve, equalisation reserve or similar provisions that an Insurer may be required to maintain to satisfy regulatory requirements in a jurisdiction other than the DIFC.
          14. Expected reinsurance and other recoveries in respect of item 13 Item 14 includes amounts in respect of reinsurance and other recoveries in respect of claims that have been incurred but not paid, up to the date to which the Return is drawn up. This includes reinsurance and other recoveries in respect of IBNR. Because of the uncertainty of the outcome of outstanding claims and IBNR, it is necessary to estimate at least a part of this balance. The basis on which the estimate is made must be consistent with the basis of estimation of the related liability, reported at item 13.

          Where, in determining the amount to be reported at item 14, an Insurer has made or considered making a provision for doubtful debt in respect of recoveries due or potentially due from a reinsurer, the Insurer must take into account the potential need to make a provision when determining any estimate to be included at item 14 or 16.

          It is common practice for Insurers to account for their exposures on General Insurance contracts in force by means of an unearned premium provision, an asset representing deferred reinsurance expense and (where necessary) a premium deficiency reserve. Insurers are referred to the instructional guidelines to item 15. An Insurer that uses an unearned premium provision and premium deficiency reserve as a proxy for Premium Liabilities may record its deferred reinsurance expense at item 16.
          15. Premium liabilities under General Insurance contracts Item 15, Premium Liability, represents the current portion of the cost of providing insurance service over the unexpired period of general insurance contracts in force at the balance date. This item must be completed having regard to the following principles:
          a The Premium Liability reported is required to cover the value of future claims payments and associated direct and indirect settlement costs arising during the unexpired portion of the contracts in question;
          b Item 15 must be recorded without deducting reinsurance and other recoveries (these are disclosed as an asset as reinsurance receivables); and
          c The requirements for recognition and measurement of this liability are set out in PIN Rule 5.4.

          As stated in the Guidance to PIN Rule 5.4.7, it is common practice for Insurers to account for their exposures on General Insurance contracts in force by means of an unearned premium provision and (where necessary) a premium deficiency reserve. Where the aggregate of the unearned premium provision and the premium deficiency reserve (both gross of reinsurance) can be shown to be not less than the amount of Premium Liability determined in accordance with PIN section 5.4, an Insurer may use that aggregate as a proxy for Premium Liability for the purposes of recording item 15 on this form.
          16. Expected reinsurance and other recoveries in respect of item 15 Reinsurance and other recoveries in respect of claims that have not yet been incurred are reported at item 16. It is necessary to estimate this balance. The basis on which the estimate is made must be consistent with the basis of estimation of the related liability, reported at item 15.
          17. Net policy benefits under Long-Term insurance contracts in force Item 17 represents the net value of future Policy Benefits under Long-Term Insurance contracts that are in force as at the date to which the Return is made up. The amount reported here must be determined in accordance with PIN section 5.6.

          Derived from DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]
          [Amended] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU 3.11 PRU 3.11 PIN11 — Reconciliation of Direct to Total Long-Term Insurance Business

        • Instructional Guidelines

          1. This form is required only for a DIFC Incorporated Insurer that undertakes Direct Long-Term Insurance Business.
          2. This form requires an Insurer that undertakes Direct Long-Term Insurance Business to identify (in summary form) the assets and liabilities that are attributable to that business, and the amount of the Minimum Capital Requirement that is attributable to the business.
          3. The Rules in this section provide instructions as to the completion of specific lines on the form. The instructions are similar to those applicable to corresponding items on forms 1 and 2.
          4. The disclosures at item 1 in column 1 must be consistent with the disclosures made on form PRU PIN14 and form PRU PIN15. Form PRU PIN14 and form PRU PIN15 identify assets that are held to cover liabilities under Direct Long-Term Insurance Business. It would not be appropriate for an Insurer to disclose on form PRU PIN11 assets that were less, either by type or in the aggregate, than the total amount of assets of each type and in the aggregate, that are asserted on form PRU PIN14 and form PRU PIN15 to be held to meet liabilities under Direct Long-Term Insurance contracts and the Minimum Capital Requirement in respect of Direct Long-Term Insurance Business. The assets disclosed on form PRU PIN11 may on the other hand exceed the total amount of assets asserted on form PRU PIN14 and form PRU PIN15 to be held to meet liabilities under Direct Long-Term Insurance contracts and the Minimum Capital Requirement in respect of Direct Long-Term Insurance Business.
          5. An Insurer must present at items 1 and 2 in column 1 the amounts of its assets and liabilities that are attributable to its Direct Long-Term Insurance Business and that are otherwise attributable, respectively.
          6. An Insurer must present at item 3 in column 1 the amounts of the components of its Minimum Capital Requirement that are attributable to its Direct Long-Term Insurance Business and that are otherwise attributable, respectively.
          7. Column 3 of this form must agree to the current year column of form PRU PIN1 or of form PRU PIN2, as follows:
          a. item 1.1 must agree to item 1.4 in the current year column of form PRU PIN1;
          b. item 1.2 must agree to the sum of items 2.9 and 7.9 in the current year column of form PRU PIN1;
          c. item 1.3 must agree to the sum of items 3.12, 8.12 and 9.7 in the current year column of form PRU PIN1;
          d. item 1.4 must agree to item 10.3 in the current year column of form PRU PIN1;
          e. item 1.5 must agree to item 11.3 in the current year column of form PRU PIN1;
          f. item 1.6 must agree to the sum of items 4.3 and 12.3 in the current year column of form PRU PIN1;
          g. item 1.7 must agree to the sum of items 5.5 and 13.5 in the current year column of form PRU PIN1;
          h. item 2.1 must agree to the sum of items 16 and 26 in the current year column of form PRU PIN1;
          i. item 2.2 must agree to the sum of items 17 and 27 in the current year column of form PRU PIN1;
          j. item 2.3 must agree to the sum of items 18, 19, 28 and 29 in the current year column of form PRU PIN1;
          k. item 2.4 must agree to the sum of items 20 and 30 in the current year column of form PRU PIN1;
          l. item 2.5 must agree to the sum of items 21 and 31 in the current year column of form PRU PIN1;
          m. item 2.6 must agree to the sum of items 22 and 32 in the current year column of form PRU PIN1;
          n. item 2.7 must agree to the sum of items 23 and 33 in the current year column of form PRU PIN1;
          o. item 2.8 must agree to the sum of items 24 and 34 in the current year column of form PRU PIN1; and
          p. items 3.1 to 3.11 must agree to items 6.1 to 6.11 respectively in the current year column of form PRU PIN2.

          [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN 3.12 PRU PIN 3.12 PIN12 — Statement of Direct Long-Term Insurance Business

        • Instructional Guidelines

          1. This form is required only for a DIFC Incorporated Insurer that undertakes Direct Long-Term Insurance Business, and is completed in respect only of Direct Long-Term Insurance Business.
          2. When this form is presented as part of a Quarterly Regulatory Return, part III is not required to be completed.
          3. This form provides the DFSA with quarterly and annual information on the makeup of Direct Long-Term Insurance premiums accounted for by a DIFC Incorporated Insurer, and new business underwritten, during the reporting period. When presented as part of the Annual Regulatory Return, it also provides information on persistency
          4. Because this part of the form is required only in the case of an Annual Regulatory Return, the reporting periods covered in part III will only ever be financial years. The form will disclose the persistency rate (the contracts remaining in force expressed as a percentage of those written, less those terminating naturally) for the most recent financial year at the end of twelve months, and the three financial years beforehand at the end of, respectively, twenty-four, thirty-six and forty-eight months.
          5. Normally in part III, the disclosure in column 1 for the previous financial year will be equal to that for the then current year in the previous year’s Return, and in a similar fashion the disclosure in column 1 for the year before the previous financial year will be equal to that for previous financial year, in the previous year’s Return, and so on. This may not be the case if a portfolio of policies in force is acquired or disposed of by the Insurer. Where this occurs, the figures for contracts affected should be adjusted as though the contracts acquired had been affected by the Insurer at the time they were first affected, and the contracts disposed of had never been affected by the Insurer. Where this is the case, the provision of particulars in a Supplementary Note will assist the DFSA’s understanding
          6. On this form, reinsurance is classified according to the underlying premiums accepted by the Insurer, not on the basis of the form of the reinsurance contract. Thus, a reinsurance of a regular premium policy is classified in column 1 or 3, regardless of the form of the reinsurance contract
          7. On this form:
          a ‘regular premiums’ means premiums payable at regular intervals during the term of the contract;
          b ‘single premiums’ means premiums that are not regular premiums. An additional premium payable on an existing regular premium contract is not a regular premium unless it constitutes one in a series of regular premiums;
          c ‘new business’ means premiums on new contracts of insurance effected during the reporting period, together with additional premiums paid on existing contracts where those additional premiums have the characteristic of new business rather than representing a payment due on the original contract; and
          d ‘new policyholders/fund members’ means policyholders who have effected a new contract of insurance during the reporting year or (in the case of Class VII business) persons who have joined a pension fund that is the subject of a contract of insurance in that Class, during the reporting year.
          8. On this form, items 28 to 51 must be presented in whole numbers, not rounded, and with no decimal place.
          9. An Insurer must present at items 1 to 7, for each Class of Business, analysed across columns 1 to 4 between participating business and non-participating business and between regular premium business and single premium business, the gross Direct Long-Term Insurance Business premiums that it has accounted for in the reporting period.
          10. An Insurer must present at item 9 the total amount included in item 8 that represents premiums receivable from Related parties of the Insurer, for each of columns 1 to 4.
          11. An Insurer must present at items 10 to 16, for each Class of Business, the reinsurance premiums that it has accounted for as ceded in the reporting period, in respect of the premiums reported at items 1 to 7. Items 10 to 16 must be analysed across columns 1 to 4 according to the type of the underlying premium, namely participating and non-participating, and regular premium and single premium.
          12. An Insurer must present at item 18 the total amount included in item 17 that represents reinsurance premiums ceded to Related parties of the Insurer, for each of columns 1 to 4.
          13. Where an Insurer is required to complete this form, Column 5 of this form for items 1 to 18 must agree to column 1 of form PRU PIN4 for items 21 to 38 respectively.
          14. An Insurer must present at items 19 to 26, for each Class of Business, analysed across columns 1 to 4 between participating business and non-participating business and between regular premium business and single premium business, the gross Direct Long-Term Insurance new business premiums that it has accounted for in the reporting period. For the purposes of this disclosure, Class I is separated into two items: item 19 being annuities, and item 20 being Class I other than annuities.
          15. An Insurer must present at items 28 to 35, for each Class of Business, analysed across columns 1 to 4 between participating business and non-participating business and between regular premium business and single premium business, the new policyholders/fund members that it recorded in the reporting period. For the purposes of this disclosure, Class I is separated into two items: item 19 being annuities, and item 20 being Class I other than annuities.
          16. An Insurer must present at item 37 for the reporting period and items 38, 39 and 40 respectively for the previous reporting period and the two immediately prior to that (in each case, the ‘reporting year in question’), the following information in respect of participating long-term contracts of insurance:
          a in column 1, the number of Direct Long-Term Insurance contracts effected during the reporting period in question;
          b in column 2, the number of contracts effected during the reporting period in question that have, during the period from their inception up to the reporting date, terminated through expiry of the contract term, through occurrence of the insured event, or otherwise through an event contemplated in the policy document other than lapse, surrender or cancellation;
          c in column 3, the number of contracts effected during the reporting period that have, during the period from their inception up to the reporting date, terminated through lapse, surrender, or cancellation or otherwise through an event not contemplated in the policy document;
          d in column 4, the number of contracts (calculated as the figure in column 1 less the sum of the two figures in columns 2 and 3) remaining in force on the reporting date; and
          e in column 5, the persistency rate, calculated as the figure in column 4 divided by the figure in column 1 less the figure in column 2, expressed as a percentage.
          17. An Insurer must present at item 42 for the reporting period and items 43, 44 and 45 respectively for the previous reporting period and the two immediately prior to that (in each case, the ‘reporting year in question’), the information set out in instructional guideline 16(a) to (c), in respect of linked long-term contracts of insurance.
          18. An Insurer must present at item 47 for the reporting period and items 48, 49 and 50 respectively for the previous reporting period and the two immediately prior to that (in each case, the ‘reporting year in question’), the information set out in instructional guideline 16(a) to (c), in respect of longterm contracts of insurance not al included in the disclosures under participating or linked long term contracts.
          19. No figure is required to be presented in column 5 at item 41, item 46 or item 51.

          [Added] DFSA GM2/2007 (Made 5 July 2007). [VER3/08-07]

      • PRU PIN 3.13 PRU PIN 3.13 PIN13 — Statement of Direct Long-Term Insurance Policy Liabilities

        • Instructional Guidelines

          1. This form is required only for an Annual Regulatory Return prepared by a DIFC Incorporated Insurer conducting Direct-Long-Term Insurance Business, and is required only in respect of that Direct Long-Term Insurance Business.
          2. This form, which is prepared only by a DIFC Incorporated Insurer conducting Direct Long-Term Insurance Business, provides the DFSA with an analysis of the breakdown of gross insurance liabilities in respect of those liabilities, and reinsurance recoverable in their respect.
          3. An Insurer must present at items 1 to 7, for each Class of Business, the gross Direct Long-Term Insurance Business policy liabilities as at the reporting date, analysed across columns 1 to 4 as follows:
          a. in column 1, the amount in respect of participating business Direct Long-Term Insurance contracts, in respect of benefits that have vested in the policyholders;
          b. in column 2, the amount in respect of participating business Direct Long-Term Insurance contracts, in respect of benefits that have not vested in the policyholders;
          c. in column 3, the amount in respect of all other Direct Long-Term Insurance Contracts; and
          d. in column 4, the amount of any additional provisions made by the insurer, that form part of gross policy liabilities but do not fall within columns 1 to 3.
          4. Vested benefits are those to which policyholders are collectively or individually entitled as a result of a guarantee in the insurance contract, and include bonuses that have been declared or allotted, The Rules in PIN5 on valuation of assets and liabilities require an Insurer also to make provision for benefits that are discretionary, for example bonuses that are expected to be declared in the future. The provision in respect of these items will be included at Column 2.
          5. An Insurer must present at item 9, for each of columns 1 to 4, the amount of the figure at item 8 that relates to liabilities in respect of parties that are Related to the Insurer.
          6. In practice, a valuation of Insurance Liabilities may include provisions that are not readily attributable to particular insurance contracts. Where this is the case, such provisions should be shown in column 4. The Actuary’s Report prepared under section PIN 7.3 includes commentary on additional provisions. Insurers should ensure that disclosure on this form is consistent with the description in the Actuary’s Report. A reconciliation may be provided in a Supplementary Note to this form.
          7. An Insurer must present at items 10 to 16, for each Class of Business, the amount of gross Direct Long-Term Insurance Business policy liabilities as at the reporting date that is recoverable under reinsurance arrangements, analysed across columns 1 to 4 in the same manner as items 1 to 7.
          8. An Insurer must present at item 18, for each of columns 1 to 4, the amount of the figure at item 17 that relates to amounts recoverable from parties that are Related to the Insurer.

          [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN 3.14 PRU PIN 3.14 PIN14 — Statement of assets covering linked Direct Long-Term Insurance Liabilities

        • Instructional Guidelines

          1. This form is required only for an Annual Regulatory Return prepared by a DIFC Incorporated Insurer conducting Direct Long-Term Insurance Business of Class III, and is required only in respect of that Class of its Direct Long-Term Insurance Business.
          2. This form, which is prepared only by a DIFC Incorporated Insurer conducting Direct Long-Term Insurance Business of Class III, provides the DFSA with information on the assets held to cover policy liabilities under insurance contracts of that Class.
          3. On this form, a reference to assets held to cover linked contract liabilities means assets that:
          a. are held by the Insurer with the intention of meeting liabilities under Class III contracts of insurance effected by it;
          b. are not reported by the Insurer on Form PRU PIN15; and
          c. so far as concerns linked benefits that are vested in policyholders, are the assets to which the contract is linked under the terms of the contract or assets that are closely equivalent to those assets, or, where the contract is linked to an index, are the assets on which that index is based or assets closely equivalent to those assets.
          4. An Insurer must present at items 1.1 to 4.3 the amount of its assets disclosed on Form PRU PIN1 that are held to cover linked contract liabilities under Direct Long-Term Insurance Business of Class III. The instructional guidelines at section 3.1 apply to the completion of this form where an item on this form has the same description as an item on Form PRU PIN1, except that no distinction is made on this form between current and non-current assets.
          5. An Insurer must present at item 4.4 the amount of any assets not falling within items 1.1 to 4.3 that are held to cover linked contract liabilities under Direct Long-Term Insurance Business of Class III. Where an Insurer includes an amount at this item, particulars of the asset must be included in a Supplementary Note, including a description of how that asset is disclosed on Form PRU PIN1.
          6. An Insurer must disclose at item 5.1 the amount of assets included in item 5 that represent amounts due from, balances with or investments in Related parties, other than amounts due under insurance contracts
          7. The amount at item 5 in column 1 must be not less than the amount on Form PRU PIN13 of item 3 column 5 less item 13 column 5.

          [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN 3.15 PRU PIN 3.15 PIN15 — Statement of assets covering non-linked Direct Long-Term Insurance Liabilities and Minimum Capital Requirement

        • Instructional Guidelines

          1. This form is required only for an Annual Regulatory Return prepared by a DIFC Incorporated Insurer conducting Direct-Long-Term Insurance Business and is required only in respect of that business.
          2. This form, which is prepared only by a DIFC Incorporated Insurer conducting Direct Long-Term Insurance Business, provides the DFSA with information on the assets held to cover policy liabilities under insurance contracts other than Class III, and assets held to cover the Minimum Capital Requirement. This form also provides the DFSA with information on the yields of those assets, to assist in interpretation of the Actuary’s Report.
          3. On this form, a reference in part I to assets held to cover participating contract liabilities, in part II to assets held to cover non-participating contract liabilities and in part III to assets held to cover the Minimum Capital Requirement means assets that:
          a. in the case of assets held to cover participating or non-participating contract liabilities, are held by the Insurer with the intention of meeting those liabilities under contracts of insurance effected by it, and in the opinion of the Directors, formed on reasonable grounds, are appropriate assets for that purpose; and
          b. are not reported by the Insurer on Form PRU PIN14 or in any other part of this form.
          4. An Insurer must present at items 1.1 to 4.3 in column 1 the amount of its assets disclosed on Form PRU PIN1 that are held to cover contract liabilities under participating Direct Long-Term Insurance Business. The instructional guidelines at section 3.1 apply to the completion of this form where an item on this form has the same description as an item on Form PRU PIN1, except that no distinction is made on this form between current and non-current assets.
          5. An Insurer must present at item 4.4 in column 1 the amount of any assets not falling within items 1.1 to 4.3 that are held to cover contract liabilities under participating Direct Long-Term Insurance Business. Where an Insurer includes an amount at this item, particulars of the asset must be included in a Supplementary Note, including a description of how that asset is disclosed on Form PRU PIN1.
          6. An Insurer must disclose at item 5.1 in column 1 the amount of assets included in item 5 that represent amounts due from, balances with or investments in Related parties, other than amounts due under insurance contracts.
          7. The amount at item 5 in column 1 must be not less than the amount on Form PRU PIN13 of the sum of item 8 in columns 1 and 2 less the sum of item 17 in columns 1 and 2, together with any element of the amount in column 4 that relates to participating business.
          8. An Insurer must present at items 6.1 to 9.3 in column 1 the amount of its assets disclosed on Form PRU PIN1 that are held to cover contract liabilities under non-participating Direct Long-Term Insurance Business other than Class III. The Rules at section 3.5 apply to the completion of this form where an item on this form has the same description as an item on Form PRU PIN1, except that no distinction is made on this form between current and non-current assets.
          9. An Insurer must present at item 9.4 in column 1 the amount of any assets not falling within items 6.1 to 9.3 that are held to cover contract liabilities under non-participating Direct Long-Term Insurance Business other than Class III. Where an Insurer includes an amount at this item, particulars of the asset must be included in a Supplementary Note, including a description of how that asset is disclosed on Form PIN1.
          10. An Insurer must disclose at item 10.1 in column 1 the amount of assets included in item 10 that represent amounts due from, balances with or investments in Related parties, other than amounts due under insurance contracts.
          11. The amount at item 10 in column 1 must be not less than the amount on Form PRU PIN13 in column 3 of item 8 after deducting item 3, less item 17 after deducting item 12, together with any element of the amount in column 4 that relates to non-participating business other than Class III.
          12. An Insurer must present at items 11.1 to 15.3 in column 1 the amount of its assets disclosed on Form PRU PIN1 that are held to cover the Minimum Capital Requirement in respect of Direct Long- Term Insurance Business. The Rules at section 3.5 apply to the completion of this form where an item on this form has the same description as an item on Form PRU PIN1, except that no distinction is made on this form between current and non-current assets.
          13. An Insurer must present at item 15.4 in column 1 the amount of any assets not falling within items 11.1 to 15.3 that are held to cover the Minimum Capital Requirement in respect of Direct Long- Term Insurance Business. Where an Insurer includes an amount at this item, particulars of the asset must be included in a Supplementary Note, including a description of how that asset is disclosed on Form PRU PIN1.
          14. An Insurer must disclose at item 15.1 in column 1 the amount of assets included in item 15 that represent amounts due from, balances with or investments in Related parties, other than amounts due under insurance contracts.
          15. For each item on this Form for which an Insurer is required to disclose an amount in column 1, the Insurer must disclose in column 2 the lower of the two following figures, expressed as a percentage:
          a. the actual annual yield achieved on the assets disclosed under that item, in the reporting period; and
          b. the annual yield expected to be achieved on the assets disclosed under that item, in the year following the reporting date.
          16. Where the figure in column 1 is derived as the result of a mathematical calculation expressed on the face of the Form. The amount to be disclosed in column 2 is not the sum of the values in column 2 for the items specified in the mathematical calculation expressed on the face of the form, but the yield in accordance with instrumental guideline 17 on the assets disclosed at the item in question in column 1.

          [Added] DFSA GM2/2007 (Made 5 July 2007). [VER3/08-07]

      • PRU PIN 3.16 PRU PIN 3.16 PIN16 — Calculation of Direct Long-Term Insurance element of Long- Term Insurance Component

        • Instructional Guidelines

          1. This form is required only for an Annual Regulatory Return prepared by a DIFC Incorporated Insurer conducting Direct Long-Term Insurance Business, and is required only in respect of that business.
          2. This form, which is prepared only by a DIFC Incorporated Insurer conducting Direct Long-Term Insurance Business, provides an Insurer with a working schedule for the calculation of the element of the Long-Term Insurance Risk Component that is attributable to its Direct Long-Term Insurance Business, and permits the DFSA to assess the compliance of that calculation with the Rules in PIN A4.12.
          3. On this Form, where an item is shaded in a column, no entry is made for that item in that column.
          4. In items 1 to 7.3 the Insurer must show, for each Class of Business, or for each sub-division of a Class of Business as shown on the face of the form:
          a. at columns 1 and 2, the amount of the Long-Term Insurance Liability, gross and net of reinsurance respectively;
          b. at column 4, expressed as a percentage, the reinsurance ratio calculated as the amount in column 2 divided by that in column 1, except that if the result is less than 85%, the figure shall be 85%; and
          c. at column 5, the amount determined by multiplying the amount in column 1 with the two percentages in columns 3 and 4.
          5. The amount in item 8 of column 1 must agree to form PRU PIN13 column 5 item 8 and the amount in item 8 of column 2 to form PRU PIN13 column 5 item 8 less item 17.
          6. At items 9 to 12 the Insurer must show, for all Direct Long-Term Insurance Business, according to the extent of death risk borne by the Insurer as shown on the face of the form:
          a. at columns 1 and 2, the amount of capital at risk, gross and net of reinsurance respectively, where capital at risk has the meaning given in PIN Rule A4.12.2(c);
          b. at column 4, expressed as a percentage, the reinsurance ratio calculated as the amount in column 2 divided by that in column 1, except that if the result is less than 50%, the figure shall be 50%; and
          c. at column 5, the amount determined by multiplying the amount in column 1 with the two percentages in columns 3 and 4.
          7. At item 14 the Insurer must show:
          a. at column 1, the amount of net administrative expenses incurred in the reporting period in respect of linked Direct Long-Term Insurance business where the Insurer bears no investment risk and expenses are not fixed for a period of more than five years; and
          b. at column 5, the amount determined by multiplying the amount in column 1 with the percentage in column 3.
          8. At item 15.1 the Insurer must show:
          a. at column 1, the amount of gross premiums in the reporting period in respect of Class IV as shown on form PRU PIN12 item 4 column 5, multiplied by 18% so far as concerns the amount up to $50 million and by 16% so far as concerns any amount in excess of $50 million;
          b. at column 3, expressed as a percentage, the amount determined by dividing the amount of form PRU PIN12 item 4 column 5 less item 13 column five, by the amount of form PRU PIN12 item 4 column 5, except that if the result of this calculation is less than 50% the figure shall be 50%.
          9. At item 15.2 the Insurer must show:
          a. at column 1, the amount of gross claims incurred in the reporting period in respect of Class IV, multiplied by 26% so far as concerns the amount up to $35 million and by 23% so far as concerns any amount in excess of $35 million; where
          b. at column 3, expressed as a percentage, the amount determined by dividing the gross claims incurred minus claims recovered, by the gross claims incurred, except that if the result of this calculation is less than 50% the figure shall be 50%.
          c. ‘gross claims incurred’ means the amount of gross claims paid at form PRU PIN5 item 42 column 5 plus the amount, if any, in respect of Direct Long Term Insurance Business of Class IV included at item 18 or 28 of column 1 of form PRU PIN1 and less any such amount included at those items of column 2 of that form: and
          d. ‘claims recovered’ means the amount of reinsurance and other recoveries in respect of paid claims at form PRU PIN5 item 51 column 5 plus the amount, if any, in respect of Direct Long Term Insurance Business of Class IV included at item 2.2, 2.4, 7.2 or 7.4 of column 1 of form PRU PIN1 and less any such amount included at those items of column 2 of that form.
          10. At item 17 the Insurer must show:
          a. at column 1, the amount of assets attributable to the Insurer’s Direct Long Term Insurance Business of Class V; and
          b. at column 5, the amount determined by multiplying the amount in column 1 with the percentage in column 3.
          11. The amount at item 18 must equal the amount at form PRU PIN11 item 3.9 column.

          [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN 3.17 PRU PIN 3.17 PIN17 — Statement of Financial Group Capital Adequacy

        • Instructional Guidelines

          1. An Authorised Firm that is required to prepare a Financial Group Capital Adequacy Report may use this form to submit that Report. Use of this form is not mandatory.
          2. Where an Authorised Firm chooses to use form PRU PIN17 for its Financial Group Capital Adequacy Report, it must do so in accordance with the instructional guidelines in this section.
          3. An Authorised Firm completing this form must present:
          a. in the header portion of the Form the information required by PIN Rule 6.6.2(2)(a), (b) and (c);
          b. at item 1, the Financial Group Capital Resources;
          c. at item 2, the Financial Group Capital Requirement
          4. An Authorised Firm completing this form must present at item 4:
          a. the names of all Authorised Firms and Financial Institutions in the Financial Group; and
          b. where an entity disclosed at (a) is itself the Parent of a Financial Group, the Financial Group Capital Resources of that group at column 1, and the Financial Group Capital Resources Requirement of that group at column 2.
          5. Where an entity is disclosed in accordance with instructional guideline 5(a) is not the Parent of a Financial Group, the entries at columns 1 and 2 of item 4 must be left blank.
          6. An Authorised Firm completing this form must present at item 5:
          a. the names of all Authorised Firms and Financial Institutions meeting the conditions set out at PIN Rule 6.6.2(2)(i);
          b. in column 1, the Capital Resources or Adjusted Capital Resources as applicable of that entity; and
          c. in column 2, the capital requirement of that entity calculated in accordance with PIN Rule 8.3.3.
          7. Where the space on the form is inadequate for the disclosures required at item 4 or item 5, the Authorised Firm completing the form must attach a continuation sheet in the form of PRU PIN17. Separate continuation sheets must be used for disclosures required at items 4 and 5. Continuation sheets must be sequentially numbered and each continuation sheet must be completed in accordance with the Rules applicable to items 4 and 5.
          8. At each of item 4 and item 5, the Authorised Firm completing the form must indicate whether or not a continuation sheet is attached, and if so the number of such continuation sheets.
          9. Form PRU PIN17 must be signed in accordance with PIN Rule 6.6.2(4).

          [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

    • PRU 3 PRU 3 Deleted

      [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.1 PRU 3.1 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.1.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.1.2 PRU 3.1.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.2 PRU 3.2 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.2.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.2.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.2.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.2.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.2.5 PRU 3.2.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.2.6 PRU 3.2.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.3 PRU 3.3 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.3.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.3.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.3.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.3.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.3.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.3.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.4 PRU 3.4 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.4.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.4.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.4.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.4.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.4.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.4.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.4.7 PRU 3.4.7 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.4.8 PRU 3.4.8 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.5 PRU 3.5 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.4 PRU 3.5.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.5 PRU 3.5.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.7 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.8 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.9 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.10 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.11 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.12 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.13 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.14 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.15 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.16 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.17 PRU 3.5.17 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.18 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.19 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.20 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.21 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.22 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.23 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.24 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.25 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.26 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.27 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.5.28 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.6 PRU 3.6 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.5 PRU 3.6.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.7 PRU 3.6.7 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.8 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.9 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.6.10 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.7 PRU 3.7 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.7.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.7.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.7.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.7.4 PRU 3.7.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.7.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.8 PRU 3.8 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.8.1 PRU 3.8.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.8.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.8.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.8.4 PRU 3.8.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.8.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.9 PRU 3.9 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.9.1 PRU 3.9.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.9.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.9.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.9.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.9.5 PRU 3.9.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.9.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.10 PRU 3.10 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.10.1 PRU 3.10.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.10.2 PRU 3.10.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.10.3 PRU 3.10.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.10.4 PRU 3.10.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.10.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.10.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.10.7 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.11 PRU 3.11 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.11.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.11.2 PRU 3.11.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.12 PRU 3.12 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.12.1 PRU 3.12.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.12.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.12.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.12.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.12.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.13 PRU 3.13 Deleted

        [Deleted] DFSA RM44/2007 (Made 1 June 2007). [VER2/06-07]

        • PRU 3.13.1 PRU 3.13.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.13.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.13.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.13.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.13.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.13.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.13.7 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.13.8 PRU 3.13.8 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.14 PRU 3.14 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.5 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.6 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.7 PRU 3.14.7 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.8 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.9 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.10 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.11 PRU 3.14.11 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.12 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.13 PRU 3.14.13 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.14.14 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.15 PRU 3.15 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.15.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.15.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.15.3 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.15.4 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

      • PRU 3.16 PRU 3.16 Deleted

        [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.16.1 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

        • PRU 3.16.2 Deleted

          [Deleted] DFSA RM44/2007 (Made 1st June 2007). [VER2/06-07]

    • PRU 4 PRU 4 PIN Forms

      Forms PRU PIN1–17

      Purpose of these forms

      An Insurer is required to submit the appropriate forms contained in this chapter in accordance with PIN App10 and PRU chapter 3.

      Notes for completing these forms

      •   All figures must by typed.
      •   The Authorised Firm's name, licence number and reporting period must be identified on each form.
      •   Unless otherwise agreed with the DFSA, the Authorised Firm or Financial Group's reporting currency must be US Dollars.
      •   Authorised Firms are reminded that Instructional guidelines are provided in chapter 3.
      •   When completed, submit the forms in line with SUP chapter 8. You may send applications by post or hand delivered and addressed to your usual supervisory contact.

      The address for postal submission is:

      DUBAI FINANCIAL SERVICES AUTHORITY
      SUPERVISION DEPARTMENT
      LEVEL 13, THE GATE
      PO BOX 75850
      DUBAI, UAE

      Amended from DFSA RM44/2007 (Made 1 June 2007). [VER2/06-07]
      Amended from DFSA GM/2/2007 (Made 5 July 2007). [VER3/08-07]

      • PRU PIN1 Statement of Financial Position

        Please download the Form in PDFPDF format.

      • PRU PIN2 Statement of Calculation of Capital Adequacy

        Please download the Form in PDFPDF format.

      • PRU PIN3 Statement of Financial Performance

        Please download the Form in PDFPDF format.

      • PRU PIN4 Statement of Premiums and Reinsurance Expense

        Please download the Form in PDFPDF format.

      • PRU PIN5 Statement of Claims and Reinsurance and other Recoveries

        Please download the Form in PDFPDF format.

      • PRU PIN6 Statement of Movement in Insurance Provisions

        Please download the Form in PDFPDF format.

      • PRU PIN7 Statement of Investment Income

        Please download the Form in PDFPDF format.

      • PRU PIN8 Statement of Acquisition Expenses

        Please download the Form in PDFPDF format.

      • PRU PIN9 Reconciliation of Financial Statements

        Please download the Form in PDFPDF format.

      • PRU PIN10 Summary Statement of Operations

        Please download the Form in PDFPDF format.

      • PRU PIN11 Reconciliation of Direct to Total Long-Term Insurance Business

        Please download the form in PDFPDF format.

        [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN12 Statement of Direct Long-Term Insurance Business

        Please download the form in PDFPDF format.

        [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN13 Statement of Direct Long-Term Insurance Policy Liabilities

        Please download the form in PDFPDF format.

        [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN14 Statement of assets covering linked Direct Long-Term Insurance Liabilities.

        Please download the form in PDFPDF format.

        [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN15 Statement of assets covering non-linked Direct Long-Term Insurance Liabilities and Minimum Capital Requirement.

        Please download the form in PDFPDF format.

        [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN16 Calculation of Direct Long-Term Insurance element of Long- Term Insurance Component

        Please download the form in PDFPDF format.

        [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]

      • PRU PIN17 Statement of Financial Group Capital Adequacy.

        Please download the form in PDFPDF format.

        Please download Appendix 1: Continuation Sheet in PDFPDF format.

        [Added] DFSA GM2/2007 (Made 5th July 2007). [VER3/08-07]