BANK 5.3.3 Limits on exposures

(1) A banking business firm must not become exposed without limit to a single counterparty. The firm must not give a general guarantee of the obligations of a counterparty.
(2) The total of the firm's net exposures to any 1 counterparty or any 1 group of connected counterparties must not exceed 25% of the firm's regulatory capital.
(2A) The total of all of the firm's net large exposures must not exceed 800% of that capital.

Note Subrules (2) and (2A) do not apply to a branch. A branch is not required to hold regulatory capital — see rule 3.1.2(1).
(3) A banking business firm may apply to the Regulatory Authority for approval for a proposed exposure in excess of the limits set out in this Chapter. An approval will be granted only in exceptional circumstances and only after the firm satisfies the authority that the proposed exposure does not expose the firm to excessive risk.
(4) The Regulatory Authority may impose a higher capital ratio on the firm to compensate for the additional risk associated with the proposed exposure.
Amended by QFCRA RM/2015-3 (as from 1st January 2016).