• BANK Part 5.4 BANK Part 5.4 Powers of Regulatory Authority

    • BANK 5.4.1 Authority can create relationships

      If the Regulatory Authority considers it necessary or desirable to do so in the interest of effective supervision of a banking business firm, the authority may direct the firm to treat a party as connected to another party.

      Derived from QFCRA RM/2014-2 (as from 1st January 2015).

    • BANK 5.4.2 Authority can set different limits and ratios

      (1) Despite anything in these rules, the Regulatory Authority may, in writing, set specific limits on a banking business firm’s exposures to particular counterparties, groups of counterparties, industries, sectors, regions, countries or asset classes on a case-by-case basis.
      (2) If a banking business firm has 1 or more large exposures (excluding exposures to sovereigns and central banks) or if, in the Regulatory Authority’s opinion, the firm is exposed to a significant level of risk concentration, the authority may impose a higher capital ratio on the firm.
      (3) In considering whether to increase the firm’s capital ratio, the Regulatory Authority will take into account:
      (a) whether the increased capital ratio would be consistent with the firm’s concentration risk and large exposure policies;
      (b) the number of exposures, and the size and nature of each; and
      (c) the nature, scale and complexity of the firm’s business and the experience of its governing body and senior management.
      (4) The Regulatory Authority may also direct the firm to take measures to reduce its level of risk concentration.

      Note Under FSR, article 16, the Regulatory Authority may modify or waive the application of a prudential requirement to an authorised firm or firms.
      Derived from QFCRA RM/2014-2 (as from 1st January 2015).