IBANK 10.3.8 Treatment of Salam Sukuk without Parallel Salam

(1) The risk-weight for salam sukuk without parallel salam must be based on the counterparty (salam supplier) unless the salam capital is guaranteed by a third party.
(2) If the salam capital is guaranteed by a third party, the risk-weight must be based on the guarantor, but only if the guarantor's risk-weight is lower than that of the salam supplier. The risk-weight for an unrated salam supplier or an unrated guarantor is 100%.
(3) The market risk capital charge for salam sukuk without a parallel salam contract or other hedge is 15% on the long position of salam exposures (that is, the charge for the underlying salam contract, as set out in rule 6.7.4).
Derived from QFCRA RM/2015-2 (as from 1st January 2016).