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Version status: Repealed | Document consolidation status: Updated to reflect all known changes
Version date: 1 January 2014 - onwards
  Version 5 of 5    

Annex II Calculating Capital Requiremetns for Settlement and Counterparty Credit Risk

Repealed from 1 January 2014

SETTLEMENT/DELIVERY RISK

1. In the case of transactions in which debt instruments, equities, foreign currencies and commodities (excluding repurchase and reverse repurchase agreements and securities or commodities lending and securities or commodities borrowing) are unsettled after their due delivery dates, an institution must calculate the price difference to which it is exposed. This is the difference between the agreed settlement price for the debt instrument, equity, foreign currency or commodity in question and its current market value, where the difference could involve a loss for the institution. It must multiply this difference by the appropriate factor in column A of Table 1 in order to calculate its capital requirement.

Table 1

Number of working days after due settlement date

(%)

5 — 15

8

16 — 30

50

31 — 45

75

46 or more

100

FREE DELIVERIES

2. An institution shall be required to hold own funds, as set out in Table 2, if:

(a) it has

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