Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

Status: This chapter was amended on 31 December 2020 as a result of Brexit. However, it is subject to the FCA Prudential Transitional Direction, which means that firms should not comply with these provisions yet. Instead, firms must follow this link and continue to comply with pre-IP completion day requirements (unless specified otherwise in the Direction). To see a full list of Handbook modules affected, please see Section B of the Annex to the Direction.

BIPRU 13.2 Unusual Transactions


If the calculation of the amount of an exposure or of a combination of exposures under BIPRU 13 would materially understate the amount of the counterparty credit risk the firm must increase the amount of the credit risk capital requirement by an amount sufficient to compensate for that understatement.


If a firm in relation to an exposure covered by BIPRU 13:

  1. (1)

    has an exposure of a non-standard type; or

  2. (2)

    an exposure that is part of a non-standard arrangement; or

  3. (3)

    has an exposure that, taken together with other exposures (whether or not they are subject to BIPRU 13), gives rise to a non-standard counterparty credit risk; or

  4. (4)

    is subject to the rule in BIPRU 13.2.1 R;

it must notify the appropriate regulator as soon as practicable of that fact, the counterparty involved, the nature of the exposure or arrangement and the treatment of those exposures it has adopted for the purpose of the calculation of the credit risk capital requirement.


BIPRU 13.2.2 R does not apply to exposures which are within the scope of a firm's CCR internal model method permission.


A firm must judge the question of what is non-standard for the purposes of BIPRU 13.2.2 R by reference to the standards:

  1. (1)

    prevailing at the time the rule is being applied; and

  2. (2)

    of firms generally who carry on business which might give rise to exposures covered by BIPRU 13 rather than merely by reference to the firm's own business.


The methodologies which have been developed assume instruments with standard characteristics. There are many examples, however, of instruments which, although based on a standard contract, contain structural features which make the rules, as stated, inappropriate. In such circumstances a firm should consult the appropriate regulator.