CP13/6 - CRD IV for Investment Firms - Financial Conduct Authority

FCA 2013/xx
considers to be comparable to those applied to institutions in terms of
robustness.
[Note: article 119(5) of the EU CRR]
Retail exposures
4.2.6 G Where an exposure is denominated in a currency other than the euro, the FCA
expects a firm to calculate its euro equivalent for determining compliance or
otherwise with the aggregate monetary limit of €1 million using any
appropriate set of exchange rates where the choice has no obvious bias and is
derived on the basis of a consistent approach (see article 123(c) of the EU
CRR).
Exposures fully and completely secured by mortgages on residential property: Ijara
mortgages
4.2.7 G The FCA considers an Ijara mortgage to be an example of an exposure to a
tenant under a property leasing transaction concerning residential property
under which the firm is the lessor and the tenant has an option to purchase.
Accordingly, the FCA expects exposures to Ijara mortgages to be subject to
all of the requirements that apply to exposures secured by mortgages on
residential property, including in respect of periodic property revaluation.
Multiple exposures on same residential property
4.2.8 G If a firm has more than one exposure secured on the same residential
property, the FCA expects the firm to aggregate all such exposures and
treat them as if they were a single exposure secured on the property.
Lifetime mortgages
4.2.9 G If a firm has an exposure to a lifetime mortgage against which the firm
intends to hold less capital under the EU CRR than it did or would have
done under BIPRU 3.4.56AR, the FCA expects the firm to notify it so
that it may take account of any relevant risks in its supervisory
assessment (see articles 124, 125 and 208 of the EU CRR).
Exposures in default
4.2.10 G When determining what portion of a past due item is secured, the FCA
expects the secured portion of an exposure covered by a mortgage
indemnity product that is eligible for credit risk mitigation purposes
under Part Three, Title II, Chapter 4 of the EU CRR (Credit risk
mitigation) to be an example of an eligible guarantee (see article 127(2)
of the EU CRR).
Items associated with particular high risk
4.2.11 G When considering which exposures in the form of units or shares in a CIU are
associated with particularly high risk, the FCA expects a firm to take into
account:
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