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  • Disclosure of Information for Investment Activities

    • BC-9.8.5

      In case of investment activities, Islamic bank licensees must provide customers with appropriate guidance on, and warnings of, relevant risks when providing regulated banking services, in relation to:

      (a) Transactions in illiquid financial instruments;
      (b) Leveraged transactions, including asset portfolios or collective investment schemes that have embedded leverage;
      (c) Financial instruments subject to high volatility in normal market conditions;
      (d) Securities repurchase agreements or securities lending agreements;
      (e) Transactions which involve credit, margin payments, or deposit of collateral;
      (f) Transactions involving material foreign exchange risk;
      (g) Interests in real estate; and/or
      (h) Islamic financial instruments.
      Amended: July 2015
      Added: April 08

    • BC-9.8.6

      In relation to transactions involving derivatives, Islamic bank licensees must provide customers with a written statement that includes explanations of their characteristics, in particular their leverage effect, liquidity and price volatility.

      Amended: July 2015
      Added: April 08

    • BC-9.8.7

      This Paragraph was deleted in July 2015.

      Deleted: July 2015
      Added: April 08

    • BC-9.8.8

      This Paragraph was deleted in July 2015.

      Deleted: July 2015
      Added: April 08

    • BC-9.8.9

      This Paragraph was deleted in July 2015.

      Deleted: July 2015
      Added: April 08

    • BC-9.8.10

      In relation to a transaction in a financial instrument that is not readily realisable, Islamic bank licensees must:

      (a) Warn the customer that there is a restricted market for such financial instruments, and that it may therefore be difficult to deal in the financial instrument or to obtain reliable information about its value; and
      (b) Disclose any position knowingly held by the Islamic bank licensee or any of its associates in the financial instrument or in a related financial instrument.
      Amended: July 2015
      Amended: January 2011
      Added: April 2008

    • BC-9.8.11

      The risk warning given to a customer or potential customer must be given due prominence in all related materials and must not be concealed or masked in any way by the wording, design or format of the information provided.

      Amended: July 2015
      Added: April 08

    • BC-9.8.12

      Risk warnings provided to a customer or potential customer about Shari'a compliant derivatives must make clear that the instrument can be subject to sudden and sharp falls in value. Where the customer may not only lose his entire investment but may also be required to pay more later, he must also be warned about this fact and the possible obligation to provide extra funding.

      Amended: July 2015
      Added: April 08