IBANK 6.5.4 Charges for Specific and General Risks

(1) The capital charge for equity position risk consists of 2 separately calculated charges:
(a) a charge for the specific risk of holding a long or short position in an individual equity; and
(b) a charge for the general risk of holding a long or short position in the market as a whole.
(2) The capital charge for specific risk is 8% on the gross position of an Islamic banking business firm in equities listed on a recognised exchange and 12% on the gross position of the firm in other equities. Gross position, of a firm in an equity market, is the sum of the absolute values of all short equity positions and all long equity positions of the firm.
(3) The capital charge for general risk is 8% on the net position of an Islamic banking business firm. Net position, of a firm in an equity market, is the difference between long equity positions and short equity positions of the firm.
(4) Equity position is the net of short and long exposures to an individual company. It is measured on the gross position across the company (rather than individual transactions).
Derived from QFCRA RM/2015-2 (as from 1st January 2016).