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BIPRU 10.2 Identification of exposures

BIPRU 10.2.1R

Unless BIPRU 10.2.2 R applies, an exposure is any of the items included in BIPRU 3.2.9 R (Exposure classes for the purposes of the standardised approach) or the table in BIPRU 3.7.2 R (Classification of off-balance-sheet items for the purposes of the standardised approach), whether held in the trading book or the non-trading book, without application of the risk weight or degrees of risk there provided for.

BIPRU 10.2.2R

An exposure does not include:

  1. (1)

    an exposure which is entirely deducted from a firm's capital resources;

  2. (2)

    in the case of foreign currency transactions, exposures incurred in the ordinary course of settlement during the 48 hours following payment; or

  3. (3)

    in the case of transactions for the purchase or sale of securities, exposures incurred in the ordinary course of settlement during the five working days following payment or delivery of the securities, whichever is earlier.

BIPRU 10.2.3G

An exposure does not include:

  1. (1)

    a transaction entered into by a firm as trustee or agent without personal liability on the part of the firm;

  2. (2)

    indemnities for lost share certificates; or

  3. (3)

    (where the firm acts as lessor, mortgagee or owner of goods under a hire-purchase arrangement) contingent liabilities for injuries, damage or loss on the part of the counterparty to that arrangement in respect of the goods that are the subject of that arrangement.

BIPRU 10.2.4G

If a firm takes a credit risk charge against an exposure equal to the value of that exposure, this can count as a capital deduction for the purposes of BIPRU 10.2.2 R (1).