Regulatory Alerts2024-09-26
Added · Updated
Underwriting of Securities: BELR
The module updates the regulatory framework for the underwriting and subunderwriting of securities by locally incorporated Authorized Institutions (AIs) to align with the Banking (Exposure Limits) Rules (BELR). It repeals the previous exemption for exposures arising from underwriting contracts, requiring AIs to ensure their aggregate exposures to any single counterparty or group of linked counterparties do not exceed 25% of Tier 1 capital. AIs must establish Board-approved underwriting policies with specific limits and monitor commitments against statutory concentration caps. Securities acquired underwriting contracts are subject to a seven-working day exemption period from equity exposure limits, with potential extensions of up to three months granted at the Monetary Authority's discretion.
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