PIB A4.11.1

Past version: effective from 09/12/2012 - 31/03/2021
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An Authorised Firm may treat the following Exposures as exempt from the Concentration Risk limits in PIB chapter 4 if they are to Counterparties not Connected to the Authorised Firm:

(a) asset items or Exposures constituting claims on central governments and Central Banks which receive a Credit Quality Grade rating 1 or 2 in accordance with PIB Rule 4.12.4;
(b) asset items or Exposures constituting claims on international organisations and multi-lateral development banks (MDBs) which receive a 0% (Credit Quality Grade rating of 1) risk weight as set out at PIB Rule 4.12.7;
(c) asset items or Exposures carrying the explicit guarantees of either (a) or (b) where the claims on the entity providing the guarantee would receive a 0% weighting (Credit Quality Grade rating of 1);
(d) Exposures for which the Authorised Firm has Collateral in the form of cash deposits or certificates of deposit, including certificates of deposit issued by the Authorised Firm, held by the Authorised Firm, or held by the Authorised Firm'sParentRegulated Financial Institution or a Subsidiary of the Authorised Firm, but only if:
(i) the Authorised Firm and its ParentRegulated Financial Institution or the Subsidiary of the Authorised Firm concerned are subject to consolidated supervision; and
(ii) the enforceability requirements in PIB section 4.13 (Credit Risk mitigation) are met;
(e) Exposures arising from undrawn credit facilities that are classified as low risk off balance sheet items and provided that an agreement has been concluded with the client or group of Connected clients under which the facility can only be drawn only if it has been ascertained that it will not cause the limit as set out in PIB Rule 4.15.5 to be exceeded;
(f) Exposures secured by mortgages on residential property and leasing transactions under which the lessor retains full ownership of the residential property leased for as long as the lessee has not exercised his option to purchase, in all cases up to 50% of the value of the residential property concerned; and
(g) material holdings in Regulated Financial Institutions and other Exposures which have been deducted from an Authorised Firm'sCapital Resources as required in PIB chapter 3.
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]