IBANK 6.2.3 Foreign Exchange Risk on Consolidated Basis

(1) If an Islamic banking business firm is assessing its foreign exchange risk on a consolidated basis, and the inclusion of the currency positions of a marginal operation of the firm is technically impractical, the firm may use, as a proxy for those positions, the internal limit in each currency that the firm applies to the operation. Marginal operation, in relation to a firm, is an operation of the firm that accounts for less than 5% of the firm's total currency positions.
(2) The absolute values of the limits must be added to the net open position in each currency, but only if the actual positions are adequately monitored against those internal limits.
Derived from QFCRA RM/2015-2 (as from 1st January 2016).