{"kind":"expression","expression":{"expr_id":"286","doc_id":"286","label":"SL 30 of 2006","is_as_enacted":"t","commenced_on":null,"superseded_on":null,"valid_from":null,"valid_to":null,"is_current":"t","incorporating":null,"akn_expr_iri":"\/akn\/ky\/act\/sl\/2006\/30\/eng@2006-01-01","akn_envelope":"{\"_canary\": {\"iri\": {\"work\": \"\/akn\/ky\/act\/sl\/2006\/30\", \"expression\": \"\/akn\/ky\/act\/sl\/2006\/30\/eng@2006-01-01\", \"manifestation\": \"\/akn\/ky\/act\/sl\/2006\/30\/eng@2006-01-01.pdf\"}, \"pdf\": {\"md5\": \"0e66e542384b18815198685abc1c0c0b\", \"path\": \"\/Users\/q\/kyleg-data\/working\/SUBORDINATE\/2006\/2006-0030\/2006-0030_SL 30 of 2006.pdf\", \"pages\": 11, \"filename\": \"2006-0030_SL 30 of 2006.pdf\"}, \"errors\": [], \"extraction\": {\"model\": null, \"stats\": {\"word_count\": 2493, \"paragraph_count\": 9, \"text_char_count\": 15816}, \"usage\": null, \"method\": \"pymupdf-text\", \"version\": \"kyleg-akn-1.0\", \"extracted_at\": \"2026-06-22\"}, \"classification\": \"text_layer\", \"validation_flags\": [], \"docai_processor_id\": null}, \"akomaNtoso\": {\"act\": {\"body\": [{\"eId\": \"sec_n1\", \"num\": null, \"text\": \"November 2006 Page 1 of 11 Rules on Rules on Rules on Rules on Large Exposures Large Exposures Large Exposures Large Exposures and Credit Risk Concentration and Credit Risk Concentration and Credit Risk Concentration and Credit Risk Concentration for Banks for Banks for Banks for Banks\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_1\", \"num\": \"1.\", \"text\": \"1. 1. 1. STATEMENT OF TATEMENT OF TATEMENT OF TATEMENT OF OBJECTIVES BJECTIVES BJECTIVES BJECTIVES To set out the Cayman Islands Monetary Authority\u2019s rules on Large Exposures and Credit Risk Concentration for banks (each of paragraphs 3 to 8 below referred to as a \u201cRule,\u201d and collectively, the \u201cRules\u201d), pursuant to the Monetary Authority Law (2004 Revision) (\u201cMAL\u201d).\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_2\", \"num\": \"2.\", \"text\": \"2. 2. 2. INTRODUCTION NTRODUCTION NTRODUCTION NTRODUCTION 2.1. Section 34 of the MAL provides that the Cayman Islands Monetary Authority (the \u201cAuthority\u201d) may issue rules: (34) (1) After private sector consultation and with the approval of the Governor, the Authority may \u2013 (a) Issue or amend rules or statements of principle or guidance concerning the conduct of licensees and their officers and employees. 2.2. This document establishes the Rules and must be read in conjunction with the Statement of Guidance on Large Exposures and Credit Risk Concentration for Banks.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_3\", \"num\": \"3.\", \"text\": \"3. 3. 3. SCOPE OF COPE OF COPE OF COPE OF APPLICATION PPLICATION PPLICATION PPLICATION 3.1. These Rules apply to all banks regulated by the Authority under the Banks and Trust Companies Law (2003 Revision) (\u201cBTCL\u201d). November 2006 Page 2 of 11 Rule 5 applies to all banks incorporated in the Cayman Islands and Rule 6 applies only to branches of banks not incorporated in the Cayman Islands. Banks with restricted licenses that prohibit third party transactions must adhere to the requirements set out in Rules 5.1 and 5.7, but are not subject to the remaining limits set out in Rules 5.2 through 5.6 and 5.8 through 5.17 respectively. 3.2. These Rules apply to a bank both on an unconsolidated (solo) basis, and on a consolidated basis that includes its subsidiaries.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_4\", \"num\": \"4.\", \"text\": \"4. 4. 4. DEFINITIONS EFINITIONS EFINITIONS EFINITIONS 4.1. A bank bank bank bank means a bank licensed under the Banks and Trust Companies Law (2003 Revision). 4.2. An exposure exposure exposure exposure is the maximum loss including accrued interest that a bank might suffer if a counterparty fails to meet its obligations. 4.3. A large exposure large exposure large exposure large exposure means any exposure that exceeds 10% of a bank\u2019s capital base. 4.4. The capi capi capi capital base tal base tal base tal base means the sum of Tier 1 and Tier 2 capital, less goodwill and other intangible assets, capital investments in affiliates and other financial institutions, and any other deductions as determined by the Authority. 4.5. A counterparty counterparty counterparty counterparty is any party with whom a bank has an exposure. 4.6. An individual counterparty individual counterparty individual counterparty individual counterparty means a single counterparty that includes a natural or legal person, government, local authority, November 2006 Page 3 of 11 public sector entity, individual trust, corporation, partnership, limited partnership, unincorporated business, and non-profit bodies. 4.7. A group of connected counterparties group of connected counterparties group of connected counterparties group of connected counterparties means two or more individual counterparties whose exposures constitute a single exposure because the counterparties have: a) a group relationship; or b) a business interdependency that is so close that it cannot be quickly unwound and in which financial problems of one counterparty is likely to cause repayment difficulties for another counterparty within the group. 4.8. A related counterparty related counterparty related counterparty related counterparty is a counterparty that is linked to the bank and includes: a) Any parent, subsidiary, or sister company that together with the bank constitutes a group; b) associated entities (in which the bank owns at least 20% but less than half of the voting shares) c) a natural person who is a director, controlling shareholder, senior officer, or otherwise has control of the bank, or any business partner or immediate relative of such individual; and d) any company of which any of the persons referred to in sub-rule (c) is a director, controlling  shareholder and senior officer or has control. 4.9. Consolidated supervision Consolidated supervision Consolidated supervision Consolidated supervision means a group-wide approach to supervision whereby all the risks (wherever they are booked) that November 2006 Page 4 of 11 are run by a banking group (including the bank), is taken into account by a capable home country banking supervisor. 4.10. Group Group Group Group means two or more entities or persons that are connected to each other in that: a) one entity legally or beneficially owns and\/or controls the other(s) (eg: parent-subsidiary relationship); or b) another entity legally or beneficially owns and\/or controls the entities (eg: sister companies); or c) the entities have common director(s) and\/or common management; or d) they are related to each other as prescribed in Rule 4.8 (c ) or (d). 4.11. Control Control Control Control means the ability of a legal or natural person to ensure the affairs of a legal entity are conducted in accordance with the wishes of that person by means of either: a) the holding of shares, voting rights, or the position of voting power; or b) by virtue of any agreement or any other powers conferred by the articles of association or other document. 4.12. Immediate relative Immediate relative Immediate relative Immediate relative in respect to any person means spouse, children including adopted children, parent, brother or sister. 4.13. Unsecured Unsecured Unsecured Unsecured means not guaranteed or protected as to payment, performance, or satisfaction by an interest in personal or real property that is charged, mortgaged, assigned or pledged (as the case may be) as security. November 2006 Page 5 of 11\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_5\", \"num\": \"5.\", \"text\": \"5. 5. 5. FOR OR OR OR ALL LL LL LL BANKS ANKS ANKS ANKS OTHER THAN THER THAN THER THAN THER THAN BANK ANK ANK ANK BRANCHES RANCHES RANCHES RANCHES Bank\u2019s Policy Statements on Large Exposures and Credit Risk Bank\u2019s Policy Statements on Large Exposures and Credit Risk Bank\u2019s Policy Statements on Large Exposures and Credit Risk Bank\u2019s Policy Statements on Large Exposures and Credit Risk Concentration Concentration Concentration Concentration 5.1. The board of directors of a bank must establish and maintain a written policy (a copy of which must be provided to the Authority) concerning its large exposures and credit risk concentrations, including exposures to an individual counterparty, group of connected counterparties, related counterparties, countries, and economic sectors. Internal Monitoring Large Exposures (Systems and Controls) Internal Monitoring Large Exposures (Systems and Controls) Internal Monitoring Large Exposures (Systems and Controls) Internal Monitoring Large Exposures (Systems and Controls) 5.2. A bank must adopt internal policies and internal limits that will ensure compliance with the exposure limits contained in Rules 5.8 through 5.17 below. 5.3. A bank must have adequate information systems to identify and measure its large exposures and identify breaches of any of these Rules. 5.4. Any breach of these Rules must be reported directly to the bank\u2019s board of directors and\/or audit committee. 5.5. A bank must assign a designated independent unit or officer, (e.g. compliance officer), to monitor large exposures to ensure its compliance with the limits established by these Rules and the bank\u2019s internal limits. 5.6. A bank must ensure that regular independent reviews are conducted to verify that the bank\u2019s established policies, limits November 2006 Page 6 of 11 and procedures are strictly adhered to in relation to large exposures. Reporting Requirements Reporting Requirements Reporting Requirements Reporting Requirements 5.7. A bank must report all large exposures quarterly on the Authority\u2019s Form BS and schedules. Single Exposure Limits Single Exposure Limits Single Exposure Limits Single Exposure Limits 5.8. A bank must not incur exposures to an individual counterparty or group of connected counterparties that exceeds 25% of its capital base, without prior written approval of the Authority. Aggregate Limits Aggregate Limits Aggregate Limits Aggregate Limits 5.9. The total of all large exposures that are not exempt pursuant to Rules 5.18.1 through 5.18.6 must not exceed 800% of the bank\u2019s total capital base, without prior written approval of the Authority. Related Counterparty Limits Related Counterparty Limits Related Counterparty Limits Related Counterparty Limits 5.10. The total of all exposures to related counterparties must not exceed 25% of a bank\u2019s capital base. 5.11. Exposures to related counterparties that are made on concessionary terms or of a capital nature may be deducted from the bank\u2019s capital base. 5.12. Exposures to related counterparties as defined in Rules 4.8 (c) and (d) may be excluded from the aggregate limits defined in Rule 5.10, and subject instead to Rule 5.8, if: a)  the terms of the exposures are agreed at arm\u2019s length; and b)  the relationship between the bank and the related November 2006 Page 7 of 11 counterparty is remote. 5.13. The total of unsecured exposures to any one group of related counterparties defined in Rules 4.8 (c) and (d) must not exceed 1% of the bank\u2019s capital base. 5.14. The total of unsecured exposures to all related counterparties defined in Rules 4.8 (c) and (d) must not exceed 5% of the bank\u2019s capital base. Guarantees Guarantees Guarantees Guarantees 5.15. In the case of banks subject to consolidated supervision, the Authority may permit exposures that are guaranteed by another banking institution (the \u201cguarantor bank\u201d) to exceed the 25% single exposure limit contained in Rule 5.8, provided: 5.15.1 the guarantor bank is supervised in accordance with the Basel Core Principles for Effective Banking Supervision; 5.15.2 the bank pre-notifies the Authority of the guarantee; 5.15.3 the guarantor bank is prepared to assume the full amount of the exposure and not just the amount in excess of 25% of the bank\u2019s capital base; 5.15.4 the guarantor bank is, in the opinion of the Authority, a continuing source of financial strength for the bank and can at any time assume the exposure itself without exceeding its own large exposure limits; November 2006 Page 8 of 11 5.15.5 the Authority receives written confirmation from the guarantor bank\u2019s supervisor that the guaranteed exposure is consolidated with the guarantor bank and does not breach any regulatory or statutory requirements in the guarantor\u2019s  home country; and 5.15.6 the Authority approves the guarantee. Exposures Secured by Cash and Securities Exposures Secured by Cash and Securities Exposures Secured by Cash and Securities Exposures Secured by Cash and Securities 5.16. An exposure secured by cash (including CDs issued by the bank) held by a bank is exempt from the limits contained in Rule 5.8 up to a maximum of 100% of the bank\u2019s capital base, provided that: 5.16.1 both the exposure and the deposit are made in the same country and currency; 5.16.2 the deposit that secures the exposure must have the same or a longer maturity than the exposure; and 5.16.3 the bank must have a legal opinion that confirms the right of set-off between the deposit and the exposure. 5.17. An exposure secured by securities may be partially exempt from the limits contained in Rule 5.8 provided that: 5.17.1 the Authority approves securities that are to be used as collateral; 5.17.2 the exposure does not exceed 100% of the bank\u2019s capital base; 5.17.3 the bank obtains a legal opinion that confirms a valid November 2006 Page 9 of 11 security agreement and right of set-off between the securities and the exposure; 5.17.4 the marked to market value of the securities must exceed the amount of the exposure. 5.17.5 The marked to market value of the securities must, a) in case of Zone A central government or central bank securities, be at least 110% of the amount of the exposure; b) in case of debt securities issued by banking institutions, investment banks that are subject to capital adequacy rules similar to banking institutions, and multilateral development banks, be at least 150% of the amount of the exposure; c) in case of other debt securities, be at least 200% of the amount of the exposure; d) in case of shares, be at least 250% of the amount of the exposure. Exemptions Exemptions Exemptions Exemptions 5.18. The following exposures are exempted from the Authority\u2019s large exposure limits set out in Rules 5.8 through 5.14: 5.18.1 exposures of one year or less to banks, securities firms (approved on a case-by-case basis) and multilateral development banks, in Zone A countries as listed in the Authority\u2019s Form BS and Schedules; 5.18.2 exposures to, or guaranteed by, central governments or central banks or monetary authorities, from Zone A countries (as listed in the Authority\u2019s Form BS and Schedules); November 2006 Page 10 of 11 5.18.3 exposures to Zone B central governments (as listed in the Authority\u2019s Form BS and Schedules) if they are denominated in the respective country\u2019s national currency and funded by liabilities in the same currency; 5.18.4 exposures that are placements made with another banking institution, with an original maturity of one year or less; 5.18.5 exposures to related counterparties where: a)  the bank is fulfilling a treasury role on behalf of the banking group; and b) the banking group (inclusive of the related counterparties) is subject to consolidated  supervision by its home country supervisor; 5.18.6 exposures that are deducted from the bank\u2019s capital. Notification and Correction of Breaches of  Exposures Notification and Correction of Breaches of  Exposures Notification and Correction of Breaches of  Exposures Notification and Correction of Breaches of  Exposures 5.19. A bank must notify the Authority immediately of any breach of any limits imposed by these Rules and as otherwise agreed with the Authority. 5.20. A bank must take immediate action to bring the exposure within permitted limits as soon as possible.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_6\", \"num\": \"6.\", \"text\": \"6. 6. 6. FOR OR OR OR BANK ANK ANK ANK BRANCHES RANCHES RANCHES RANCHES 6.1. A bank branch must report its twenty (20) largest exposures on November 2006 Page 11 of 11 the Authority\u2019s Form BS and schedules. 6.1.1 A bank branch must comply with the large exposure limits established by its head office. 6.1.2 If in the Authority\u2019s opinion, a branch\u2019s head office does not have a comparable relevant policy, the Authority may require a branch to comply with any one or more of Rules set out in Rule 5 herein, as appropriate.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_7\", \"num\": \"7.\", \"text\": \"7. 7. 7. ADDITIONAL DDITIONAL DDITIONAL DDITIONAL RESERVATIONS AND ESERVATIONS AND ESERVATIONS AND ESERVATIONS AND LIMITS IMITS IMITS IMITS Notwithstanding any limits or exemptions provided by these Rules, the Authority may on a case-by-case basis: a) limit the availability and amount of any exemption provided by Rules 5.18.1 through 5.18.6; b) vary the limits as  provided in Rules 5.8 through 5.17; c) require a bank to limit its exposures to any country, economic sector, or as the Authority may determine.\", \"element\": \"section\", \"heading\": null}, {\"eId\": \"sec_8\", \"num\": \"8.\", \"text\": \"8. 8. 8. ENFORCEMENT NFORCEMENT NFORCEMENT NFORCEMENT Whenever there has been a breach of the Rules, the Authority\u2019s policies and procedures as contained in its Enforcement Manual will apply, in addition to any other powers provided in the Banks and Trust Companies Law (2003 Revision) and the Monetary Authority Law (2004 Revision).\", \"element\": \"section\", \"heading\": null}], \"meta\": {\"notes\": null, \"workflow\": null, \"lifecycle\": {\"source\": \"#cilegis\", \"eventRef\": [{\"eId\": \"e_commence_2006_01_01\", \"date\": \"2006-01-01\", \"type\": \"generation\", \"source\": \"#cilegis\"}]}, \"references\": {\"source\": \"#canary\", \"TLCRole\": [], \"TLCEvent\": [{\"eId\": \"ev_commencement\", \"href\": \"\/akn\/ontology\/canary\/event\/commencement\", \"showAs\": \"commencement\"}], \"TLCPerson\": [], \"TLCConcept\": [{\"eId\": \"inForce\", \"href\": \"\/akn\/ontology\/canary\/concept\/temporal\/in-force\", \"showAs\": \"in force\"}], \"TLCProcess\": [], \"TLCLocation\": [], \"TLCOrganization\": [{\"eId\": \"cilegis\", \"href\": \"\/akn\/ontology\/canary\/organization\/editor\/cilegis\", \"showAs\": \"Cayman Islands legislation mirror (kyleg)\"}]}, \"temporalData\": {\"source\": \"#cilegis\", \"temporalGroup\": [{\"eId\": \"tg_inforce_2006_01_01\", \"timeInterval\": [{\"end\": null, \"start\": \"#e_commence_2006_01_01\", \"duration\": null, \"refersTo\": \"#inForce\"}]}]}, \"classification\": null, \"identification\": {\"source\": \"#cilegis\", \"FRBRWork\": {\"FRBRuri\": \"\/akn\/ky\/act\/sl\/2006\/30\", \"FRBRdate\": [{\"date\": \"2006-01-01\", \"name\": \"generation\"}], \"FRBRthis\": \"\/akn\/ky\/act\/sl\/2006\/30\/!main\", \"FRBRalias\": [{\"name\": \"cmsId\", \"value\": \"2006-0030\"}], \"FRBRauthor\": [{\"as\": \"#editor\", \"href\": \"\/akn\/ontology\/canary\/organization\/editor\/cilegis\"}], \"FRBRnumber\": \"30 of 2006\", \"FRBRcountry\": \"ky\", \"FRBRsubtype\": \"subordinate\"}, \"FRBRExpression\": {\"FRBRuri\": \"\/akn\/ky\/act\/sl\/2006\/30\/eng@2006-01-01\", \"FRBRdate\": [{\"date\": \"2006-01-01\", \"name\": \"generation\"}], \"FRBRthis\": \"\/akn\/ky\/act\/sl\/2006\/30\/eng@2006-01-01\/!main\", \"FRBRauthor\": [{\"as\": \"#editor\", \"href\": \"\/akn\/ontology\/canary\/organization\/editor\/cilegis\"}], \"FRBRlanguage\": \"eng\"}, \"FRBRManifestation\": {\"FRBRuri\": \"\/akn\/ky\/act\/sl\/2006\/30\/eng@2006-01-01.xml\", \"FRBRdate\": [{\"date\": \"2026-06-22\", \"name\": \"generation\"}], \"FRBRthis\": \"\/akn\/ky\/act\/sl\/2006\/30\/eng@2006-01-01.xml\", \"FRBRauthor\": [{\"as\": \"#editor\", \"href\": \"\/akn\/ontology\/canary\/organization\/editor\/cilegis\"}], \"FRBRformat\": \"application\/xml\"}}}, \"name\": \"act\", \"header\": {\"title\": \"Rule \u2013 On Large Exposures and Credit Risk Concentration for Banks \u2013 November 2006 (SL 30 \u2013 2006)\", \"actNumber\": \"30 of 2006\", \"longTitle\": null}}, \"doc\": null, \"bill\": null, \"judgment\": null}}","akn_full_text":"November 2006\n\nPage 1 of 11\n\nRules on\nRules on\nRules on\nRules on\nLarge Exposures\nLarge Exposures\nLarge Exposures\nLarge Exposures and Credit Risk Concentration\nand Credit Risk Concentration\nand Credit Risk Concentration\nand Credit Risk Concentration\nfor Banks\nfor Banks\nfor Banks\nfor Banks\n\n1.\n1.\n1.\n1.\n\n    STATEMENT OF\nTATEMENT OF\nTATEMENT OF\nTATEMENT OF OBJECTIVES\nBJECTIVES\nBJECTIVES\nBJECTIVES\nTo set out the Cayman Islands Monetary Authority\u2019s rules on Large\nExposures and Credit Risk Concentration for banks (each of\nparagraphs 3 to 8 below referred to as a \u201cRule,\u201d and collectively, the\n\u201cRules\u201d), pursuant to the Monetary Authority Law (2004 Revision)\n(\u201cMAL\u201d).\n\n2.\n2.\n2.\n2.\nINTRODUCTION\nNTRODUCTION\nNTRODUCTION\nNTRODUCTION\n2.1. Section 34 of the MAL provides that the Cayman Islands Monetary\nAuthority (the \u201cAuthority\u201d) may issue rules:\n\n(34) (1) After private sector consultation and with the approval\nof the Governor, the Authority may \u2013\n\n(a) Issue or amend rules or statements of principle or guidance\nconcerning the conduct of licensees and their officers and\nemployees.\n\n2.2. This document establishes the Rules and must be read in\nconjunction with the Statement of Guidance on Large Exposures\nand Credit Risk Concentration for Banks.\n\n3.\n3.\n3.\n3. SCOPE OF\nCOPE OF\nCOPE OF\nCOPE OF APPLICATION\nPPLICATION\nPPLICATION\nPPLICATION\n3.1. These Rules apply to all banks regulated by the Authority under\nthe Banks and Trust Companies Law (2003 Revision) (\u201cBTCL\u201d).\n\nNovember 2006\n\nPage 2 of 11\n\nRule 5 applies to all banks incorporated in the Cayman Islands\nand Rule 6 applies only to branches of banks not incorporated in\nthe Cayman Islands. Banks with restricted licenses that prohibit\nthird party transactions must adhere to the requirements set out\nin Rules 5.1 and 5.7, but are not subject to the remaining limits\nset out in Rules 5.2 through 5.6 and 5.8 through 5.17\nrespectively.\n\n3.2. These Rules apply to a bank both on an unconsolidated (solo)\nbasis, and on a consolidated basis that includes its subsidiaries.\n\n4.\n4.\n4.\n4. DEFINITIONS\nEFINITIONS\nEFINITIONS\nEFINITIONS\n4.1. A bank\nbank\nbank\nbank means a bank licensed under the Banks and Trust\nCompanies Law (2003 Revision).\n\n4.2. An exposure\nexposure\nexposure\nexposure is the maximum loss including accrued interest that\na bank might suffer if a counterparty fails to meet its obligations.\n\n4.3. A large exposure\nlarge exposure\nlarge exposure\nlarge exposure means any exposure that exceeds 10% of a\nbank\u2019s capital base.\n\n4.4. The capi\ncapi\ncapi\ncapital base\ntal base\ntal base\ntal base means the sum of Tier 1 and Tier 2 capital, less\ngoodwill and other intangible assets, capital investments in\naffiliates and other financial institutions, and any other\ndeductions as determined by the Authority.\n\n4.5. A counterparty\ncounterparty\ncounterparty\ncounterparty is any party with whom a bank has an exposure.\n\n4.6. An individual counterparty\nindividual counterparty\nindividual counterparty\nindividual counterparty means a single counterparty that\nincludes a natural or legal person, government, local authority,\n\nNovember 2006\n\nPage 3 of 11\n\npublic sector entity, individual trust, corporation, partnership,\nlimited partnership, unincorporated business, and non-profit\nbodies.\n\n4.7. A group of connected counterparties\ngroup of connected counterparties\ngroup of connected counterparties\ngroup of connected counterparties means two or more\nindividual counterparties whose exposures constitute a single\nexposure because the counterparties have:\na) a group relationship; or\nb) a business interdependency that is so close that it\ncannot be quickly unwound and in which financial\nproblems of one counterparty is likely to cause\nrepayment difficulties for another counterparty within\nthe group.\n\n4.8. A related counterparty\nrelated counterparty\nrelated counterparty\nrelated counterparty is a counterparty that is linked to the bank\nand includes:\na) Any parent, subsidiary, or sister company that together\nwith the bank constitutes a group;\nb) associated entities (in which the bank owns at least 20%\nbut less than half of the voting shares)\nc) a natural person who is a director, controlling\nshareholder, senior officer, or otherwise has control of\nthe bank, or any business partner or immediate relative\nof such individual; and\nd) any company of which any of the persons referred to in\nsub-rule (c) is a director, controlling  shareholder and\nsenior officer or has control.\n\n4.9. Consolidated supervision\nConsolidated supervision\nConsolidated supervision\nConsolidated supervision means a group-wide approach to\nsupervision whereby all the risks (wherever they are booked) that\n\nNovember 2006\n\nPage 4 of 11\n\nare run by a banking group (including the bank), is taken into\naccount by a capable home country banking supervisor.\n\n4.10. Group\nGroup\nGroup\nGroup means two or more entities or persons that are\nconnected to each other in that:\na) one entity legally or beneficially owns and\/or controls\nthe other(s) (eg: parent-subsidiary relationship); or\nb) another entity legally or beneficially owns and\/or\ncontrols the entities (eg: sister companies); or\nc) the entities have common director(s) and\/or common\nmanagement; or\nd) they are related to each other as prescribed in Rule 4.8\n(c ) or (d).\n\n4.11. Control\nControl\nControl\nControl means the ability of a legal or natural person to ensure\nthe affairs of a legal entity are conducted in accordance with the\nwishes of that person by means of either:\na) the holding of shares, voting rights, or the position of\nvoting power; or\nb) by virtue of any agreement or any other powers\nconferred by the articles of association or other\ndocument.\n\n4.12. Immediate relative\nImmediate relative\nImmediate relative\nImmediate relative in respect to any person means spouse,\nchildren including adopted children, parent, brother or sister.\n\n4.13. Unsecured\nUnsecured\nUnsecured\nUnsecured means not guaranteed or protected as to payment,\nperformance, or satisfaction by an interest in personal or real\nproperty that is charged, mortgaged, assigned or pledged (as the\ncase may be) as security.\n\nNovember 2006\n\nPage 5 of 11\n\n5.\n5.\n5.\n5. FOR\nOR\nOR\nOR ALL\nLL\nLL\nLL BANKS\nANKS\nANKS\nANKS OTHER THAN\nTHER THAN\nTHER THAN\nTHER THAN BANK\nANK\nANK\nANK BRANCHES\nRANCHES\nRANCHES\nRANCHES\nBank\u2019s Policy Statements on Large Exposures and Credit Risk\nBank\u2019s Policy Statements on Large Exposures and Credit Risk\nBank\u2019s Policy Statements on Large Exposures and Credit Risk\nBank\u2019s Policy Statements on Large Exposures and Credit Risk\nConcentration\nConcentration\nConcentration\nConcentration\n5.1. The board of directors of a bank must establish and maintain a\nwritten policy (a copy of which must be provided to the Authority)\nconcerning its large exposures and credit risk concentrations,\nincluding exposures to an individual counterparty, group of\nconnected counterparties, related counterparties, countries, and\neconomic sectors.\n\nInternal Monitoring Large Exposures (Systems and Controls)\nInternal Monitoring Large Exposures (Systems and Controls)\nInternal Monitoring Large Exposures (Systems and Controls)\nInternal Monitoring Large Exposures (Systems and Controls)\n5.2. A bank must adopt internal policies and internal limits that will\nensure compliance with the exposure limits contained in Rules\n5.8 through 5.17 below.\n\n5.3. A bank must have adequate information systems to identify and\nmeasure its large exposures and identify breaches of any of these\nRules.\n\n5.4. Any breach of these Rules must be reported directly to the bank\u2019s\nboard of directors and\/or audit committee.\n\n5.5. A bank must assign a designated independent unit or officer,\n(e.g. compliance officer), to monitor large exposures to ensure its\ncompliance with the limits established by these Rules and the\nbank\u2019s internal limits.\n\n5.6. A bank must ensure that regular independent reviews are\nconducted to verify that the bank\u2019s established policies, limits\n\nNovember 2006\n\nPage 6 of 11\n\nand procedures are strictly adhered to in relation to large\nexposures.\n\nReporting Requirements\nReporting Requirements\nReporting Requirements\nReporting Requirements\n5.7. A bank must report all large exposures quarterly on the\nAuthority\u2019s Form BS and schedules.\n\nSingle Exposure Limits\nSingle Exposure Limits\nSingle Exposure Limits\nSingle Exposure Limits\n\n5.8. A bank must not incur exposures to an individual counterparty or\ngroup of connected counterparties that exceeds 25% of its capital\nbase, without prior written approval of the Authority.\n\nAggregate Limits\nAggregate Limits\nAggregate Limits\nAggregate Limits\n5.9. The total of all large exposures that are not exempt pursuant to\nRules 5.18.1 through 5.18.6 must not exceed 800% of the bank\u2019s\ntotal capital base, without prior written approval of the Authority.\n\nRelated Counterparty Limits\nRelated Counterparty Limits\nRelated Counterparty Limits\nRelated Counterparty Limits\n5.10. The total of all exposures to related counterparties must not\nexceed 25% of a bank\u2019s capital base.\n\n5.11. Exposures to related counterparties that are\nmade on\nconcessionary terms or of a capital nature may be deducted from\nthe bank\u2019s capital base.\n\n5.12. Exposures to related counterparties as defined in Rules 4.8 (c)\nand (d) may be excluded from the aggregate limits defined in\nRule 5.10, and subject instead to Rule 5.8, if:\na)  the terms of the exposures are agreed at arm\u2019s length;\nand\nb)  the relationship between the bank and the related\n\nNovember 2006\n\nPage 7 of 11\n\ncounterparty is remote.\n\n5.13. The total of unsecured exposures to any one group of related\ncounterparties defined in Rules 4.8 (c) and (d) must not exceed\n1% of the bank\u2019s capital base.\n\n5.14. The total of unsecured exposures to all related counterparties\ndefined in Rules 4.8 (c) and (d) must not exceed 5% of the bank\u2019s\ncapital base.\n\nGuarantees\nGuarantees\nGuarantees\nGuarantees\n5.15. In the case of banks subject to consolidated supervision, the\nAuthority may permit exposures that are guaranteed by another\nbanking institution (the \u201cguarantor bank\u201d) to exceed the 25%\nsingle exposure limit contained in Rule 5.8, provided:\n5.15.1\nthe guarantor bank is supervised in accordance with\nthe\nBasel\nCore\nPrinciples\nfor\nEffective\nBanking\nSupervision;\n\n5.15.2\nthe bank pre-notifies the Authority of the guarantee;\n\n5.15.3\nthe guarantor bank is prepared to assume the full\namount of the exposure and not just the amount in\nexcess of 25% of the bank\u2019s capital base;\n\n5.15.4\nthe guarantor bank is, in the opinion of the Authority,\na continuing source of financial strength for the bank\nand can at any time assume the exposure itself without\nexceeding its own large exposure limits;\n\nNovember 2006\n\nPage 8 of 11\n\n5.15.5\nthe Authority receives written confirmation from the\nguarantor bank\u2019s supervisor that the guaranteed\nexposure is consolidated with the guarantor bank and\ndoes\nnot\nbreach\nany\nregulatory\nor\nstatutory\nrequirements in the guarantor\u2019s  home country; and\n\n5.15.6\nthe Authority approves the guarantee.\n\nExposures Secured by Cash and Securities\nExposures Secured by Cash and Securities\nExposures Secured by Cash and Securities\nExposures Secured by Cash and Securities\n5.16. An exposure secured by cash (including CDs issued by the bank)\nheld by a bank is exempt from the limits contained in Rule 5.8 up\nto a maximum of 100% of the bank\u2019s capital base, provided that:\n5.16.1 both the exposure and the deposit are made in the same\ncountry and currency;\n\n5.16.2 the deposit that secures the exposure must have the same\nor a longer maturity than the exposure; and\n\n5.16.3 the bank must have a legal opinion that confirms the right\nof set-off between the deposit and the exposure.\n\n5.17. An exposure secured by securities may be partially exempt from\nthe limits contained in Rule 5.8 provided that:\n\n5.17.1 the Authority approves securities that are to be used as\ncollateral;\n\n5.17.2 the exposure does not exceed 100% of the bank\u2019s capital\nbase;\n\n5.17.3 the bank obtains a legal opinion that confirms a valid\n\nNovember 2006\n\nPage 9 of 11\n\nsecurity agreement and right of set-off between the\nsecurities and the exposure;\n\n5.17.4 the marked to market value of the securities must exceed\nthe amount of the exposure.\n\n5.17.5\nThe marked to market value of the securities must,\na) in case of Zone A central government or central bank\nsecurities, be at least 110% of the amount of the exposure;\nb) in case of debt securities issued by banking institutions,\ninvestment banks that are subject to capital adequacy rules\nsimilar to banking institutions, and multilateral development\nbanks, be at least 150% of the amount of the exposure;\nc) in case of other debt securities, be at least 200% of the\namount of the exposure;\nd) in case of shares, be at least 250% of the amount of the\nexposure.\n\nExemptions\nExemptions\nExemptions\nExemptions\n5.18. The following exposures are exempted from the Authority\u2019s\nlarge exposure limits set out in Rules 5.8 through 5.14:\n\n5.18.1 exposures of one year or less to banks, securities firms\n(approved on a case-by-case basis) and multilateral\ndevelopment banks, in Zone A countries as listed in the\nAuthority\u2019s Form BS and Schedules;\n\n5.18.2 exposures to, or guaranteed by, central governments or\ncentral banks or monetary authorities, from Zone A\ncountries (as listed in the Authority\u2019s Form BS and\nSchedules);\n\nNovember 2006\n\nPage 10 of 11\n\n5.18.3 exposures to Zone B central governments (as listed in the\nAuthority\u2019s\nForm\nBS\nand\nSchedules)\nif\nthey\nare\ndenominated in the respective country\u2019s national currency\nand funded by liabilities in the same currency;\n\n5.18.4 exposures that are placements made with another\nbanking institution, with an original maturity of one year\nor less;\n\n5.18.5 exposures to related counterparties where:\na)  the bank is fulfilling a treasury role on behalf of the\nbanking group; and\nb) the\nbanking\ngroup\n(inclusive\nof\nthe\nrelated\ncounterparties) is subject to consolidated  supervision\nby its home country supervisor;\n\n5.18.6 exposures that are deducted from the bank\u2019s capital.\n\nNotification and Correction of Breaches of  Exposures\nNotification and Correction of Breaches of  Exposures\nNotification and Correction of Breaches of  Exposures\nNotification and Correction of Breaches of  Exposures\n5.19.\nA bank must notify the Authority immediately of any breach of\nany limits imposed by these Rules and as otherwise agreed\nwith the Authority.\n\n5.20.\nA bank must take immediate action to bring the exposure\nwithin permitted limits as soon as possible.\n\n6.\n6.\n6.\n6. FOR\nOR\nOR\nOR BANK\nANK\nANK\nANK BRANCHES\nRANCHES\nRANCHES\nRANCHES\n6.1. A bank branch must report its twenty (20) largest exposures on\n\nNovember 2006\n\nPage 11 of 11\n\nthe Authority\u2019s Form BS and schedules.\n6.1.1 A bank branch must comply with the large exposure limits\nestablished by its head office.\n\n6.1.2 If in the Authority\u2019s opinion, a branch\u2019s head office does\nnot have a comparable relevant policy, the Authority may\nrequire a branch to comply with any one or more of Rules\nset out in Rule 5 herein, as appropriate.\n\n7.\n7.\n7.\n7. ADDITIONAL\nDDITIONAL\nDDITIONAL\nDDITIONAL RESERVATIONS AND\nESERVATIONS AND\nESERVATIONS AND\nESERVATIONS AND LIMITS\nIMITS\nIMITS\nIMITS\nNotwithstanding any limits or exemptions provided by these Rules, the\nAuthority may on a case-by-case basis:\na) limit the availability and amount of any exemption provided by\nRules 5.18.1 through 5.18.6;\nb) vary the limits as  provided in Rules 5.8 through 5.17;\nc) require a bank to limit its exposures to any country, economic\nsector, or as the Authority may determine.\n\n8.\n8.\n8.\n8. ENFORCEMENT\nNFORCEMENT\nNFORCEMENT\nNFORCEMENT\nWhenever there has been a breach of the Rules, the Authority\u2019s\npolicies and procedures as contained in its Enforcement Manual will\napply, in addition to any other powers provided in the Banks and Trust\nCompanies Law (2003 Revision) and the Monetary Authority Law (2004\nRevision).","akn_extracted_at":"2026-06-22 15:40:05.832607+00","cms_id":"2006-0030","law_type":"subordinate","year":"2006","number":"30","title":"Rule \u2013 On Large Exposures and Credit Risk Concentration for Banks \u2013 November 2006 (SL 30 \u2013 2006)","status":"in_force"},"provenance":{"files":[{"file_id":"5181","expr_id":"286","kind":"akn_xml","filename":"2006-0030_SL 30 of 2006.akn.xml","source_url":null,"storage_path":"\/Users\/q\/kyleg-data\/working\/SUBORDINATE\/2006\/2006-0030\/2006-0030_SL 30 of 2006.akn.xml","content_md5":"71e5129b566287ccd678fd776f96ed0a","byte_size":"19395","http_last_modified":null,"fetched_at":"2026-06-22 15:40:05.870917+00"},{"file_id":"571","expr_id":"286","kind":"pristine_pdf","filename":"2006-0030_SL 30 of 2006.pdf","source_url":"\/cms\/images\/LEGISLATION\/SUBORDINATE\/2006\/2006-0030\/2006-0030_SL 30 of 2006.pdf","storage_path":"\/Users\/q\/kyleg-data\/pristine\/SUBORDINATE\/2006\/2006-0030\/2006-0030_SL 30 of 2006.pdf","content_md5":"0e66e542384b18815198685abc1c0c0b","byte_size":"61645","http_last_modified":null,"fetched_at":"2026-06-21 23:09:36.32009+00"},{"file_id":"572","expr_id":"286","kind":"working_pdf","filename":"2006-0030_SL 30 of 2006.pdf","source_url":"\/cms\/images\/LEGISLATION\/SUBORDINATE\/2006\/2006-0030\/2006-0030_SL 30 of 2006.pdf","storage_path":"\/Users\/q\/kyleg-data\/working\/SUBORDINATE\/2006\/2006-0030\/2006-0030_SL 30 of 2006.pdf","content_md5":"0e66e542384b18815198685abc1c0c0b","byte_size":"61645","http_last_modified":null,"fetched_at":"2026-06-21 23:09:36.32009+00"}],"paragraph_count":7,"latest_history":null},"quality":{"expr_id":"286","doc_id":"286","quality_state":"known_issue","quality_score":"30","needs_human_review":"t","deterministic_categories":"{duplicate_text,page_header_footer_noise,paragraph_numbering_problem,title_mismatch}","llm_categories":"{ocr_noise,duplicate_text,paragraph_numbering_problem}","repair_actions":"{collapse_duplicate_text,rebuild_paragraphs,rerun_ocr_or_source_text_extraction,strip_page_furniture,verify_title_metadata}","finding_severity_counts":"{\"low\": 1, \"high\": 1, \"medium\": 1}","finding_summary":"Extraction contains pervasive OCR\u2011related duplication artifacts requiring cleanup before further processing.","assessed_at":"2026-06-22 15:29:46.097549+00","updated_at":"2026-06-22 15:29:46.097549+00"}}