Bank Negara issues Capital Adequacy Framework for Operational Risk and Exposures to Central Counterparties and revises Capital Adequacy Framework (Capital Components) policy documents
19 December 2023
Bank Negara Malaysia issued the following policy documents on 15 December 2023:
The above-referred policy documents, which set out standards and guidance for financial institutions to calculate the capital required in relation to operational risk and exposure to central counterparties in line with Basel III, will come into effect on
1 January 20251. When these policy documents come into effect:
- the policy document on Capital Adequacy Framework (Operational Risk) will supersede:
- Part C of the policy document on Capital Adequacy Framework (Basel II – Risk-Weighted Assets) issued on 3 May 2019; and
- the policy document on Capital Adequacy Framework for Islamic Banks (Risk-Weighted Assets) issued on 3 May 2019; and
- the policy document on Capital Adequacy Framework (Exposures to Central Counterparties) will supersede:
- paragraphs 4 and 5 of Appendix VIII of the policy document on Capital Adequacy Framework (Basel II – Risk-Weighted Assets) issued on 3 May 2019; and
- paragraphs 4 and 5 of Appendix VI of the policy document on Capital Adequacy Framework for Islamic Banks (Risk-Weighted Assets) issued on 3 May 2019.
At the same time, Bank Negara Malaysia also issued the following revised policy documents:
The revised policy documents come into effect immediately.
The revised policy document on Capital Adequacy Framework (Capital Components) supersedes the policy document on Capital Adequacy Framework (Capital Components) issued on 9 December 2020 .
The revised policy document on Capital Adequacy Framework for Islamic Banks (Capital Components) supersedes:
- the policy document on Capital Adequacy Framework for Islamic Banks (Capital Components) issued on 9 December 2020; and
- the Guidelines on the Recognition and Measurement of Profit Sharing Investment Account as Risk Absorbent issued on 22 July 2011.
1 Refer to paragraph 2.2 of the policy document on Capital Adequacy Framework (Exposures to Central Counterparties) for details of the transitional arrangements relating to certain paragraphs of the policy document.
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