CA-3.6.16
The following table sets out the Musharakah categories that attract capital charges:
Musharakah Category | Credit RW | Market Risk Capital Charge |
Specialized financing |
Between 90-270% RW of the contributed amount* to the business venture based on the four categories. |
NA |
Other | 150% RW** of the contributed amount to the business venture less any specific provisions (if there is a third party guarantee, the RW of the guarantor shall be substituted for that of the assets for the amount of any such guarantee, if lower). | NA |
Musharakah meeting the definition of trading book | As set out in the applicable market risk section (Chapter CA-5). |
* In the case of Diminishing Musharakah, the contributed amount is based on the remaining balance of the invested amount.
** 100% RW may be applied if the funds can be withdrawn by the bank at short notice of 5 working days.
Apr 08