The International Financial Services Centres Authority on 25th May 2021 has published the Framework on computation of Exposure Ceiling for Finance Companies which aims at monitoring the exposures that are significant compared to the capital resources of the Finance Companies/Finance Units and protect them from concentration risk arising from large exposure to a single counterparty or to a group of connected counterparties.
The framework shall be applicable to specialized and core activities being undertaken by the FC/FU registered with the Authority unless such specific requirements are prescribed for undertaking any of the non-core activities, as defined in the Regulations, by the Authority from time to time.
The FC/FU shall report to the Board at regular intervals and to the Authority as may be specified by the Authority from time to time, All exposures with values equal to or above ten percent of the FC/FU’s eligible capital base and All other exposures, without the effect of credit risk mitigation being taken into account, with values equal to or above ten percent of the FC/FUs eligible capital base.
