X hits on this document

PDF document

Repealed by LN. 2013/198 as from 1.1.2014 - page 53 / 94

211 views

0 shares

0 downloads

0 comments

53 / 94

Financial Services (Investment and Fiduciary Services)

FINANCIAL SERVICES (CAPITAL ADEQUACY OF INVESTMENT

FIRMS) REGULATIONS 2007 constituent equities. These positions may be treated as underlying positions in the equities in question, and may, subject to the approval of the Authority, be netted against opposite positions in the underlying equities themselves.

38. The Authority shall ensure that any investment firm which has netted off its positions in one or more of the equities constituting a stock-index future against one or more positions in the stock index future itself has adequate capital to cover the risk of loss caused by the future’s values not moving fully in line with that of its constituent equities; it shall also do this when an investment firm holds opposite positions in stock index futures which are not identical in respect of either their maturity or their composition or both.

39. Notwithstanding paragraphs 37 and 38, stock-index futures which are exchange traded and in the opinion of the Authority represent broadly diversified indices shall attract a capital requirement against general risk of 8 %, but no capital requirement against specific risk. Such stock-index futures shall be included in the calculation of the overall net position in paragraph 33, but disregarded in the calculation of the overall gross position in the same paragraph.

40. If a stock-index future is not broken down into its underlying positions, it shall be treated as if it were an individual equity. However, the specific risk on this individual equity may be ignored if the stock-index future in question is exchange traded and, in the opinion of the Authority, represents a broadly diversified index.

UNDERWRITING

41. In the case of the underwriting of debt and equity instruments, the Authority may allow an investment firm to use the following procedure in calculating its capital requirements. Firstly, the investment firm shall calculate the net positions by deducting the underwriting positions which are subscribed or sub-underwritten by third parties on the basis of formal agreements. Secondly, it shall reduce the net positions by the reduction factors in Table 4

Table 4

working day 0:

100%

working day 1:

90%

working days 2 to 3:

75%

working day 4:

50%

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

1989-47

Repealed Subsidiary 2007/002

Document info
Document views211
Page views211
Page last viewedMon Dec 05 13:10:56 UTC 2016
Pages94
Paragraphs2606
Words31302

Comments