IBANK 6.6.5 Instruments that have no Specific Risk Capital Charge

(1) Profit rate swaps, cross-currency swaps and binding unilateral promises in foreign exchange transactions are exempt from specific risk capital charges. However, a specific risk capital charge must be calculated if the underlying is a debt security or an index representing a basket of debt securities.
(2) Forward contracts and binding unilateral promises (other than those in foreign exchange transactions) are exempt from specific risk capital charges if:
(a) the Islamic banking business firm has a right to substitute cash settlement for physical delivery under the contract; and
(b) the price on settlement is calculated with reference to a general market price indicator.
(3) A contract or promise that is exempt under subrule (2) must not be offset against specific securities (including those securities that make up the market index).
Derived from QFCRA RM/2015-2 (as from 1st January 2016).