Calculation of the Equity Risk Capital Requirement Guidance

There are two methods for calculating the Equity Risk Capital Requirement: the standard method and the simplified method. The standard method requires two separate calculations. The first is Specific Risk and the second is General Market Risk. The simplified method is easier to calculate but usually results in a higher Capital Requirement than the standard method. In addition, Authorised Firms must calculate an Interest Rate Risk Capital Requirement for a forward, a future, an option or a company issued warrant.

Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]