CA-11.2 CA-11.2 De Minimis Exemptions
CA-11.2.1
A
conventional bank licensee doing negligible business in foreign currencies and which does not take foreign exchange positions for its own account may, at the discretion of the CBB evidenced by the CBB's prior written approval, be exempted from calculating the capital requirements on these positions.January 2015CA-11.2.1A
The CBB is likely to be guided by the following criteria in deciding to grant exemption to any
conventional bank licensee under Paragraph CA-11.2.1:(a) Theconventional bank licensee'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 Total Capital; and(b) Theconventional bank licensee's overall net open position, as defined in Paragraph CA-11.3.1, does not exceed 2% of its Total Capital as defined in Chapter CA-2.January 2015CA-11.2.2
The criteria listed in Paragraph CA-11.2.1A are only intended to be guidelines, and a
conventional bank licensee will not automatically qualify for exemptions upon meeting them. The CBB may also, in its discretion, fix a minimum capital requirement for aconventional bank licensee which is exempted from calculating its foreign exchange risk capital requirement, to cover the risks inherent in its foreign currency business.January 2015CA-11.2.3
The CBB may, at a future date, revoke an exemption previously granted to a
conventional bank licensee , if the CBB is convinced that the conditions on which the exemption was granted no longer exist.January 2015
