CA-6.2 CA-6.2 De minimis exemptions
CA-6.2.1
A bank doing negligible business in foreign currencies and which does not take foreign exchange positions for its own account may, at the discretion of the Central Bank evidenced by the Central Bank's prior written approval, be exempted from calculating the capital requirements on these positions. The Central Bank is likely to be guided by the following criteria in deciding to grant exemption to any bank:
(a) The bank's holdings or taking of positions in foreign currencies, including gold, defined as the greater of the sum of the gross long positions and the sum of the gross short positions in all foreign currencies and gold, does not exceed 100% of its eligible capital; and(b) The bank's overall net open position, as defined in Paragraph CA-6.3.1, does not exceed 2% of its eligible capital as defined in Chapter CA-2.October 07CA-6.2.2
The criteria listed in Paragraph CA-6.2.1 above are only intended to be guidelines, and a bank will not automatically qualify for exemptions upon meeting them. The Central Bank may also, in its discretion, fix a minimum capital requirement for a bank which is exempted from calculating its foreign exchange risk capital requirement, to cover the risks inherent in its foreign currency business.
October 07CA-6.2.3
The Central Bank may, at a future date, revoke an exemption previously granted to a bank, if the Central Bank is convinced that the conditions on which the exemption was granted no longer exist.
October 07
