CM-4.2.2

Past version: Effective from 01 Oct 2007 to 31 Dec 2010
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As a general rule, exposures should be reported on a gross basis (i.e. no offset). However, debit balances on accounts may be offset against credit balances where they relate to the same customer or to corporate customers in the same business group if:

(a) a legally enforceable right of set off exists in all cases (as confirmed by an independent legal opinion addressed to the bank) in respect of the recognised amounts, and
(b) the bank intends either to settle on a net basis, or to realise the debit balances and settle the credit balances simultaneously.

For a group facility, a full cross guarantee structure must also exist (i.e. full multilateral guarantees must be in place between all the companies within the group).

October 07