Regulatory Alerts2017-10-23
Added
Management of Credit Risk Derived from Trading Activity of Customers in Derivatives and Securities
The Bank of Israel issues Proper Conduct of Banking Business Directive No. 330, establishing requirements for banking corporations to manage credit risk from customer trading in derivatives and securities. The directive mandates specific risk management measures, including corporate governance frameworks, stress tests, and limits, with more stringent controls such as daily exposure monitoring for customers engaging in speculative activity. It requires banking corporations to collect variation and initial margin in the form of extremely liquid assets for OTC derivatives and securities trading. Additionally, Directive No. 335 is canceled effective July 1, 2018.
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