• IBANK 6.5.1 IBANK 6.5.1 Relation to market risk

    (1) In measuring its market risk, an Islamic banking business firm must include the risk of holding or taking positions in equities (equity position risk).

    Note For the treatment of options with equities as the underlying, see rule 6.3.8(1). Under that rule, this Part on equity position risk applies to the option, but the capital charge must be based on the delta-weighted positions included in the measurement of specific and general risks.
    (2) If equities are to be received or delivered under a binding unilateral promise, the firm must report any foreign currency or profit rate exposure from the other leg of the contract in accordance with Part 6.2 or Part 6.6, as the case requires.
    Derived from QFCRA RM/2015-2 (as from 1st January 2016).

    • IBANK 6.5.1 Guidance

      If an Islamic banking business firm is exposed to profit rate risk on equity positions, the firm must include the relevant profit rate positions in the calculation of profit rate risk in the trading book — see rule 6.6.2(4).

      Derived from QFCRA RM/2015-2 (as from 1st January 2016).