| (11) |
Matters specifically related to a bank or controlling company's required amount of capital and reserve funds |
| (a) |
As a minimum, a bank or controlling company's aggregate consolidated required amount of capital and reserve funds in terms of these Regulations shall be equal to the sum of amounts calculated in accordance with the relevant requirements specified in these Regulations, which amounts shall be based on the reporting bank or controlling company's consolidated exposure to— |
| (iii) |
operational risk; and |
| (iv) |
such other risk exposure as may be specified in these Regulations. |
| (b) |
Notwithstanding anything to the contrary contained in the Act or these Regulations, when a bank or controlling company calculates its consolidated required amount of capital and reserve funds— |
| (i) |
a bank or controlling company that adopted the standardised approach for the measurement of its exposure to credit risk as envisaged in regulation 38(2)(a)(i) read with the relevant provisions specified in regulations 23(8) and 23(9) shall risk weight any relevant investment in— |
| (A) |
a majority owned or controlled commercial entity; or |
| (B) |
a commercial entity in respect of which the bank or controlling company holds a significant minority interest, |
which investment does not exceed 15 per cent of the consolidated amount of issued common equity tier 1 capital and reserve funds, additional tier 1 capital and reserve funds and tier 2 capital and reserve funds of the reporting bank or controlling company, as reported in items 41, 65 and 78 of the form BA 700, at no less than 100 per cent;
| (ii) |
a bank or controlling company that adopted the IRB approach for the measurement of its exposure to credit risk as envisaged in regulation 38(2)(a)(ii) read with the relevant provisions specified in regulations 23(10) to 23(14) shall risk weight any relevant investment in— |
| (A) |
a majority owned or controlled commercial entity; or |
| (B) |
a commercial entity in respect of which the bank or controlling company holds a significant minority interest, |
which investment does not exceed 15 per cent of the consolidated amount of issued common equity tier 1 capital and reserve funds, additional tier 1 capital and reserve funds and tier 2 capital and reserve funds of the reporting bank or controlling company, as reported in items 41, 65 and 78 of the form BA 700, in accordance with the relevant requirements relating to equity instruments specified in regulation 31, provided that the relevant risk weight relating to the said investment shall in no case be less than 100 per cent.
| (c) |
Unless specifically otherwise provided in these Regulations, whenever a bank or controlling company calculates its consolidated required amount of capital and reserve funds in accordance with the relevant requirements specified in these Regulations and subsequently wishes to determine the related consolidated amount of risk-weighted exposure, the bank or controlling company, as the case may be, shall, based on the formula specified below, convert the said consolidated required amount of capital and reserve funds to the relevant required amount of consolidated risk-weighted exposure. |
RWE K x 12,5
where:
|
RWE |
is the required consolidated amount of risk-weighted exposure |
|
K |
is the consolidated required amount of capital and reserve funds calculated in accordance with the relevant requirements specified in these Regulations |
Contingency Fees Act, 1997
