BANK 3.2.30 Higher capital imposed on overseas branch

(1) If a banking business firm has an overseas branch, the firm must deduct from CET 1 capital whichever is the higher of any capital requirement imposed by the Regulatory Authority or the financial regulator in the jurisdiction in which the branch is located.
(2) This rule does not apply if the overseas branch is a consolidated entity of the banking business firm. A branch is a consolidated entity if it is included in the firm’s consolidated returns.
(3) Despite subrule (2), if the financial regulator in the jurisdiction in which a branch is located imposes a capital requirement for the foreign branch, a banking firm must deduct from CET 1 capital the amount of any shortfall between the actual capital held by the foreign branch and that capital requirement.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).