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  • Structural Positions

    • CA-5.5.13

      Positions of a structural nature (i.e. non-dealing), may be excluded from the calculation of the net open currency positions. These may include:

      (a) Positions taken deliberately in order to hedge, partially or totally, against the adverse effects of exchange rate movements on the bank's CAR;
      (b) Positions related to items that are deducted from the bank'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, where the profits are held in the currency concerned.
      Amended: October 2013
      Apr 08

    • CA-5.5.14

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

      (a) The concerned bank provides adequate documentary evidence to the CBB which establishes the fact that the positions proposed to be excluded are, indeed, of a structural nature (i.e. non-dealing) and are merely intended to protect the bank's CAR. For this purpose, the CBB may ask written representations from the bank's management or directors.
      (b) Any exclusion of a position is consistently applied, with the treatment of the structural positions remaining the same for the life of the associated assets or other items.
      Apr 08