PIB App6 Guidance

1. PIB section 6.11 provides that an Authorised Firm in Categories 1, 2, 3A and 5 must use the Basic Indicator Approach to calculate its Operational Risk Capital Requirement, unless the firm has approval from the DFSA to use the Standardised Approach or Alternative Standardised Approach. In this PIB App6:
a. the Basic Indicator Approach is prescribed in PIB section A6.1;
b. the Standardised Approach is prescribed in PIB section A6.2; and
c. the Alternative Standardised Approach is prescribed in PIB section A6.3.
2. The application of various components of the rules on Operational Risk to Authorised Firms licensed to carry out various financial services is detailed in the table below:
Financial Services Prudential Category Capital requirement Systems and controls requirement PII cover
Accepting Deposits 1 YES YES NO
Providing Credit 2 YES YES NO
Dealing in Investments as Principal 2 YES YES NO
Dealing in Investments as Matched Principal 3A YES YES NO
Dealing in Investments as Agent 3A YES YES NO
Managing Assets 3C NO YES YES
Managing a Collective Investment Fund 3C NO YES YES
Managing a Restricted PSIA 3C NO YES YES
Providing Custody 3B or 3C NO YES YES
Providing Trust Services 3C or 4 NO YES YES
Acting as the Trustee of a Fund 3B NO YES YES
Providing Money Services (issuing Stored Value) 3C NO YES YES
Providing Money Services (other than issuing Stored Value) 3D NO YES YES
Arranging Deals in Investments 4 NO YES YES
Advising on Financial Products 4 NO YES YES
Arranging Custody 4 NO YES NO
Insurance Intermediation 4 NO YES YES
Insurance Management 4 NO YES YES
Providing Fund Administration 4 NO YES YES
Operating an Alternative Trading System 4 NO YES NO
Arranging Credit and Advising on Credit 4 NO YES YES
Operating a Crowdfunding Platform 4 NO YES YES
Arranging or Advising on Money Service 4 NO YES YES
Managing an Unrestricted PSIA 5 or 1 YES YES NO
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]
[Amended] DFSA RM188/2016 (Made 7th December 2016). [VER26/02-17]
[Amended] DFSA RMI270/2020 (Made 26th February 2020). [VER36/04-20]