IBANK 8.4.35 Treatment of increased liquidity needs related to contracts that allow substitution of non-HQLA collateral

(1) This rule applies to the following kinds of transaction:
(a) transactions where:
(i) an Islamic banking business firm holds HQLA collateral;
(ii) the counterparty has the right to substitute non-HQLA collateral for some or all of the HQLA collateral without the firm's consent; and
(iii) the collateral is not segregated;
(b) transactions where:
(i) an Islamic banking business firm has the right to receive HQLA collateral;
(ii) the counterparty has the right to deliver non-HQLA collateral instead of some or all of the HQLA collateral without the firm's consent; and
(iii) the collateral is not segregated.
(2) The runoff rate for increased liquidity needs related to such a transaction is 100% of the value of HQLA collateral for which non- HQLA collateral can be substituted or delivered, as the case requires.
Inserted by QFCRA RM/2018-2 (as from 1st May 2018).