IBANK 6.5.6 Charges for Index Contracts

(1) For an index contract on an index that an Islamic banking business firm considers diversified, the firm must apply a general risk capital charge of 8%, and a specific risk capital charge of 2%, to the net long or short position in the contract.
(2) For any other index contract, the firm must apply a general risk capital charge of 8%, and a specific risk capital charge of 4%, to the net long or short position in the contract.
(3) If required to do so by the Regulatory Authority, the firm must demonstrate why the firm considers an index to be a diversified index.
Derived from QFCRA RM/2015-2 (as from 1st January 2016).