Offering Shari'a Financing Contracts

Entering into, or making arrangements for another person to enter into, a contract to provide finance in accordance with Shari'a principles, such as murabaha, bay muajjal, bay salam, ijara wa iktina and istisna'a contracts.

Off-balance Sheet ('OBS') Activities

A banks' business that does not generally involve booking assets or liabilities. Examples include the granting of standby commitments, letters of credit and guarantees.

Off-site ATM

Automated Teller Machine. An unattended electronic machine in a public place (other than the premises of the owning bank), connected to a data system and related equipment and activated by a bank customer to obtain cash withdrawals and other banking services.

Operating a collective investment undertaking

Operating a collective investment undertaking means operating, establishing or winding up a Shari'a compliant CIU.

Operational Deposits

The deposits generated by clearing, custody and cash management activities.

Operational risk

The risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk², but excludes strategic and reputational risk.

² Legal risk includes, but is not limited to, exposure to fines, penalties, or punitive damages resulting from supervisory actions, as well as private settlements.

Option(s)

An option is a contract giving the buyer the right, but not the obligation, to buy or sell any of the following at a specific price on or before a certain date:

Originator Information

Other derivative contracts

Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event), as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market or an MTF, are cleared and settled through recognised clearing houses or are subject to regular margin calls.

Outsourcing

The use of a person to provide customised services to a licensee other than (a) a member of a licensee's board acting in his capacity as such (b) an individual employed by a licensee under a contract of service or (c) a licensed insurance manager providing services to a captive insurance firm.

Outsourcing Provider

The person providing the customised services as described in the definition of "outsourcing"

Overseas conventional bank licensees

Overseas conventional retail bank licensee(s)

Overseas conventional wholesale bank licensee

An overseas conventional bank licensee, licensed as a wholesale bank (see Volume 1, Section LR-1.2)

Over the counter (OTC)

A decentralised market (as opposed to an exchange market) where geographically dispersed dealers are linked by telephones and computer screens. OTC trades are more often than not, denominated in non-standard amounts and on non-standard terms (eg maturity outside IMM dates). The term may also refer to trading in securities not listed on a stock or bond exchange.

Over-the-Counter Option

An option traded off-exchange, as opposed to a listed stock option. The OTC option has a direct link between buyer and seller, has no secondary market, and has no standardization of striking prices and expiration dates.