IBANK 10.4.1 Retained securitisation exposures

(1) An Islamic banking business firm that acts as originator of a sukuk issuance may, despite having transferred the underlying assets, continue to be exposed (through retained securitisation exposures) in relation to the securitisation. The firm must hold regulatory capital against all of its retained securitisation exposures.
(2) The sources of retained securitisation exposures include:
(a) investments in the securitisation (including the investment required under subrule (3));
(b) credit enhancements provided by the firm; and
(c) liquidity facilities provided by the firm.
A repurchased securitisation exposure must be treated as a retained securitisation exposure.

Note 1 For paragraph (a), the exposure arising from investments by an Islamic banking business firm in a securitisation originated by the firm is an on-balance sheet exposure.

Note 2 For paragraphs (b) and (c), the exposures arising from the provision of credit enhancements and liquidity facilities by an Islamic banking business firm in relation to a securitisation originated by the firm are off-balance sheet exposures.
(3) An Islamic banking business firm that acts as originator of a sukuk issuance must retain 5% of the total issuance.
Inserted by QFCRA RM/2017-1 (as from 1st April 2017).