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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Recognised Jurisdictions and Funds
Declaration Notices
Financial Markets Tribunal
Rulebook Modules
Prudential — Investment, Insurance Intermediation and Banking Module (PIB) [VER34/12-19]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases

Whole SectionText only Print Print Manager Link

(1 version)
Dec 9 2012 onwards

PIB 4.15.18

Whole 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.

An Authorised FirmG may exclude an ExposureG from the Concentration RiskG limits set out in Rules PIB 4.15.5 to PIB 4.15.7 if the Authorised Firm'sG ParentG ;

(a) is set to increase, on the basis of a legally binding agreement, the Authorised Firm'sG Capital ResourcesG , promptly and on demand, by:
(i) an amount that is sufficient to reverse completely the effect of any loss the Authorised FirmG may sustain in connection with that ExposureG ; or
(ii) the amount required to ensure that the Authorised FirmG complies with its Capital RequirementG set out in PIB chapter 3; or
(b) guarantees the ExposureG to a CounterpartyG or to a group of Closely RelatedG CounterpartiesG which are not ConnectedG to the Authorised FirmG only if the following conditions are met:
(i) the guarantee is to be provided by the Authorised Firm'sG ParentG , or regulated member of its GroupG ;
(ii) the criteria for guarantees must be in line with the Credit RiskG mitigation requirements as set out in PIB section 4.13;
(iii) the entity providing the guarantee must be a bank regulated to standards acceptable to the DFSAG ;
(iv) the total amount of guarantees provided to the Authorised FirmG must be less than 10% of the ParentG (or other) Authorised Firm'sG Capital ResourcesG ;
(v) the ParentG must be rated as a Credit Quality GradeG of 1 or 2 by a recognised credit rating agency;
(vi) the Authorised FirmG must provide confirmation from the home state Financial Services RegulatorG that it is satisfied that the ParentG Authorised FirmG has sufficient resources to provide such guarantees and has no objection to the provision of such guarantees;
(vii) the Authorised FirmG should provide an annual confirmation that there are no changes to the enforceability of such guarantees; and
(viii) the Authorised FirmG must notify the DFSAG when such guarantees represent 200%, 400% and 600% of Capital ResourcesG . The overall Large ExposureG limit of 800% will apply.
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]