Home   Browse contents   View updates   Search  
     Quick search
Go
   

Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Prudential — Investment, Insurance Intermediation and Banking Module (PIB) [VER33/02-19]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

Whole SectionText only Print Print Manager Link


  Versions
(1 version)
 
Dec 9 2012 onwards

PIB 4.13.5

View whole sectionWhole Section PDF

The definitive version of DFSA handbook text is the PDF version as that is the text of the instrument as made and published by the DFSA.

To view past versions of this module in PDF format, please visit the Archive.

(1) For an Authorised FirmG using the FCSA, eligible financial CollateralG comprises:
(a) cash (as well as certificates of deposit or other similar instruments issued by the Authorised FirmG ) on deposit with the Authorised FirmG ;
(b) gold;
(c) any debt security:
(i) with an Original MaturityG of one year or less that has a short-term Credit Quality GradeG of 3 or better as set out in PIB section 4.12; or
(ii) with an Original MaturityG of more than one year that has a Credit Quality GradeG of 4 or better as set out in PIB section 4.12 if it is issued by a central government or Central BankG , or a Credit Quality GradeG of 3 or better as set out in PIB section 4.12 if it is issued by any other entity;
(d) any debt security issued by a bank that does not have an external credit assessment by a recognised ECAIG if it fulfils the following criteria:
(i) any debt security which is listed on a regulated exchange;
(ii) the debt security is classified as senior debt, not subordinated to any other debt obligations of its IssuerG ;
(iii) all other rated debt securities issued by the same IssuerG which rank equally with the mentioned debt security have a long term or short term (as applicable) Credit Quality GradeG by a recognised ECAIG of "3" or better;
(iv) the Authorised FirmG is not aware of information to suggest that the issue would justify a Credit Quality GradeG of below "3" as indicated in (iii) above; and
(v) the Authorised FirmG can demonstrate to the DFSAG that the market liquidity of the debt security is sufficient to enable the Authorised FirmG to dispose the debt security at market price.
(e) any equity security (including convertible bonds) that is included in a main index; or
(f) any UnitG in a Collective Investment FundG where:
(i) a price for the units is publicly quoted daily; and
(ii) at least 90% of the deposited property of the FundG is invested in instruments listed in this RuleG .
(2) Cash-funded credit-linked notesG issued by an Authorised FirmG against ExposuresG in the Non-Trading BookG which fulfil the criteria for eligible Credit DerivativesG must be treated as cash collateralised transactions.
(3) Cash, mentioned in (1)(a), includes cash on deposit, certificates of deposit or other similar instruments issued by the Authorised FirmG that are held as CollateralG at a third-party bank in a non-custodial arrangement and that are pledged or assigned to the Authorised FirmG . This is subject to the pledge or assignment being unconditional and irrevocable. Under the FCSA, the risk weight to be applied to the ExposureG covered by such CollateralG must be the risk weight of the third-party bank.
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]