AI Summary of Article 351 De minimis and weighting for foreign exchange risk
This memorandum outlines the requirements for calculating the own funds requirement concerning foreign exchange risk for institutions. Should the total net foreign exchange and gold positions exceed 2% of total own funds, a specific calculation must ensue as stipulated in Article 352.
The essential requirement entails that the institution must ascertain the sum of its net foreign exchange position and gold position, denominated in the reporting currency, and apply an 8% multiplier to determine the own funds requirement for foreign exchange risk, ensuring compliance with prevailing regulatory obligations.
Article 351 De minimis and weighting for foreign exchange risk
If the sum of an institution's overall net foreign exchange position and its net gold position, calculated in accordance with the procedure set out in Article 352, exceeds 2 % of its total own funds, the institution shall calculate an own funds requirement for foreign exchange risk. The own funds requirement for foreign exchange risk shall be the sum of its overall net foreign exchange position and its net gold position in the reporting currency, multiplied by 8 %.