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  • Structural Positions

    • CA-11.3.7

      Positions of a structural, i.e. non-dealing, nature as set out below, may be excluded from the calculation of the net open currency positions:

      (a) Positions are taken deliberately in order to hedge, partially or totally, against the adverse effects of exchange rate movements on the conventional bank licensee's CAR;
      (b) Positions related to items that are deducted from the conventional bank licensee's capital when calculating its capital base in accordance with the rules and guidelines in this Module, such as investments in non-consolidated subsidiaries; and
      (c) Retained profits held for payout to parent.
      January 2015

    • CA-11.3.7A

      The CBB will consider approving the exclusion of the above positions for the purpose of calculating the capital requirement, only if the following conditions are met:

      (a) The conventional bank licensee provides adequate documentary evidence to the CBB which establishes the fact that the positions proposed to be excluded are, indeed, of a structural, i.e. non-dealing, nature and are merely intended to protect the conventional bank licensee's CAR. For this purpose, the CBB may ask for written representations from the conventional bank licensee's management or directors; and
      (b) Any exclusion of a position is consistently applied, with the treatment of the hedge remaining the same for the life of the associated assets or other items.
      January 2015