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PIB A4.4.1

A qualifying SFT must comply with the following requirements:

(a) both the Exposure and the Collateral are cash, or a Security issued by a central government or Central Bank qualifying for a 0% risk weight under the Rules in PIB section 4.12;
(b) both the Exposure and the Collateral are denominated in the same currency;
(c) either the transaction is overnight or both the Exposure and the Collateral are marked-to-market daily and are subject to daily remargining;
(d) following a Counterparty's failure to remargin, the time that is required between the last mark-to-market before the failure to remargin and the liquidation of the Collateral is considered to be no more than four business days;
(e) the transaction is settled across a recognised settlement system for that type of transaction;
(f) the documentation covering the agreement is standard market documentation for repos, reverse repos, Securities, lending transactions or Securities borrowing transactions in the Securities concerned;
(g) the transaction is governed by documentation specifying that if the Counterparty fails to satisfy an obligation to deliver cash or Securities or to deliver margin, or otherwise defaults, then the transaction may be terminated immediately; and
(h) upon any event of default, regardless of whether the Counterparty is insolvent or bankrupt, the Authorised Firm has the unfettered, legally enforceable right to immediately seize and liquidate the Collateral for the benefit of the Authorised Firm.
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]