Circular on article 27 of Rules on Solvency Ratio of Financial Undertakings

29.12.2006

The FME sent out a circular to financial institutions dated 25 Nov. 2005 regarding article 27 of Rules on the Solvency Ratio of Financial Undertakings No. 530 of 30 June 2003. The text of the circular was (in an unofficial non-binding translation):
To financial Institutions with trading book positions The Financial Supervisory Authority (FME) has decided to use a discretion in the definition of qualifying items in art. 2 of the Rules on the Solvency Ratio of Financial Undertakings No. 530 of 30 June 2003.
Among qualifying items as defined in art. 2 of the rules, financial institutions may count debt instruments fulfilling the criteria of the definition if they have a valid rating from at least one of the rating agencies listed in the table below, provided that no rating is lower than listed:

Rating agency

Minimum rating

 

BondsMoney market instruments

Moody's Investors Service

Baa3P3

Standard & Poor's Corporation

BBB-A3

Fitch Ratings

BBB-F-3

Such items shall be given a risk weight corresponding to the remaining maturity in accordance with the mentioned
 art. 27.

 

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