IFR 5.4.7

Past version: effective from 01/03/2010 - 08/12/2012
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(1) In this section:
(a) "ICX" represents the Exposure determined by an Authorised Firm as applicable to an Islamic Contract; and
(b) "ICW represents the risk weighting or capital charge assessed by an Authorised Firm as appropriate to that Islamic Contract.
(2) Where an Islamic Contract is in the Non-Trading Book, an Authorised Firm must determine the PSIACOMcredit for that contract by applying the following formula:
ICX × ICW × 8%.
(3) Where an Islamic Contract is in the Trading Book, an Authorised Firm must determine the PSIACOMcredit for that contract in accordance with the methodology in PIB A4.5, PIB A4.6 and PIB A4.7 as appropriate.
(4) An Authorised Firm must calculate its PSIACOMcredit of all contracts by:
(a) identifying all Islamic Contracts to which this section applies;
(b) valuing the underlying investment or asset of each contract and reducing the value of any such investment or asset in the manner stipulated in PIB Rule 4.3.2(c), the result of which constitutes the ICX for that contract;
(c) determining the risk weighting or capital charge appropriate to each contract, which will constitute the ICW for that contract;
(d) applying the respective formula in IFR Rule 5.4.7(2) or (3) to determine of PSIACOMcredit in respect of each contract; and
(e) summing the PSIACOMcredit of each contract to determine the PSIACOMcredit applicable to the Authorised Firm.
Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]