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  • Identification of Additional Risks

    • CM-2.3.40

      Bahraini Islamic bank licensees must identify exposures to a CCP related to clearing activities and sum together these exposures. Exposures related to clearing activities are listed in the table below, together with the exposure value to be used:

      Trade Exposures The exposure value of trade exposures must be calculated using the exposure measures prescribed in this Chapter for the respective type of exposures.
      Segregated Initial Margin The exposure value is 0.
      Non-segregated Initial Margin The exposure value is the nominal amount of initial margin posted.
      Pre-funded Default Fund Contributions Nominal amount of the funded contribution.
      Unfunded Default Fund Contributions The exposure value is 0.
      Equity Stakes The exposure value is the nominal amount.
      Added: June 2022

    • CM-2.3.41

      Regarding exposures subject to clearing services (the licensee acting as a clearing member or being a client of a clearing member), the licensee must determine the counterparty to which exposures must be assigned by applying the provisions of Module CA.

      Added: June 2022

    • CM-2.3.42

      Bahraini Islamic bank licensees must apply a risk weight of 2 percent to their trade exposure to the CCP in respect of OTC Shari’a compliant hedging instruments, exchange-traded Shari’a compliant hedging instrument transactions, Shari’a compliant securities financing transactions (SFTs) and long-settlement transactions, where the licensee acts as a clearing member of a CCP for its own purposes. Where the clearing member offers clearing services to clients, the 2 percent risk weight also applies to the clearing member’s trade exposure to the CCP that arises when the clearing member is obligated to reimburse the client for any losses suffered due to changes in the value of its transactions in the event that the CCP defaults.

      Added: June 2022

    • CM-2.3.43

      Other types of exposures that are not directly related to clearing services provided by the CCP, such as funding facilities, credit facilities, guarantees, etc. must be measured according to the rules set out in this Chapter as for any other type of counterparty. These exposures will be added together and be subjected to the large exposure limit.

      Added: June 2022