BANK 4.8.2 Concept of related parties

(1) The concept of parties being related to a banking business firm is used in these rules in relation to parties over which the firm exercises control or parties that exercise control over the firm. The concept is primarily used in relation to the requirement that the firm's transactions be at arm's length.
(2) In contrast, the concept of parties being connected to one another (which is discussed with concentration risk in Chapter 5) is used in these rules to measure concentration risk and large exposures.
(3) It is of course possible for connected counterparties to be related to the banking business firm holding the exposure concerned.

Note For purposes of concentration risk, the firm's exposure to connected counterparties (whether related or not) is taken to be a single risk.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).