6.3.1 Regulation Addressed through Business Rules
The application supports multiple pre-configured rules and scenarios based on BNM specified scenario parameters such as inflow rates, outflow rates, run-offs, haircuts and so on.
Table 5-12 Pre-configured rules and scenarios based on BNM specified scenario
| Rule Name | Rule Description | Regulatory Requirement Addressed | Regulatory ReferenceBNM/RH/PD 029-13 |
|---|---|---|---|
| LRM - BNM - HQLA Level 1 - Cash and Central Bank Reserve | This rule reclassifies cash, central bank reserves as HQLA Level 1 assets in accordance with the criteria specified by BNM. | The classification of cash and central bank reserves as HQLA level 1 asset is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 1 - Sovereign, CB , PSE and MDB Issued Zero Risk Weight Securities | This rule reclassifies zero risk weight securities issued by central banks, sovereigns, Public Sector Enterprises, International Organizations and multilateral development banks as HQLA Level 1 assets, in accordance with the criteria specified by BNM. | The classification of marketable zero risk weight securities, issued by foreign sovereigns, central banks and multinational development banks as HQLA Level 1 assets is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 1 - Sovereign, CB , PSE and MDB Guaranteed Zero Risk Weight Securities | This rule reclassifies zero risk weight securities guaranteed by central banks, sovereigns, Public Sector Enterprises, International Organizations and multilateral development banks as HQLA Level 1 assets, in accordance with the criteria specified by BNM. | The classification of marketable zero risk weight securities, guaranteed by foreign sovereigns, central banks and multinational development banks as HQLA Level 1 assets is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 1 - Sec by Sovereign and CB with Non-Zero Risk Weight in Domestic Currencies | This rule reclassifies non-zero risk weight securities issued by sovereigns and central banks, denominated in their local currency as HQLA Level 1 assets, in accordance with the criteria specified by BNM. | The classification of marketable securities, issued by non-zero risk weight foreign sovereigns, central banks and multinational development banks, denominated in their local currency as HQLA Level 1 assets is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 1 - Sec by Sovereign and CB with Non-Zero Risk Weight in Foreign Currency | This rule reclassifies non-zero risk weight securities issued by sovereigns and central banks, denominated in foreign currency as HQLA Level 1 assets, in accordance with the criteria specified by BNM. | The classification of marketable securities, issued by non-zero risk weight foreign sovereigns, central banks and multinational development banks, denominated in their foreign currency as HQLA Level 1 assets is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 1 - Restricted Committed Liquidity Facility | This rule reclassifies undrawn portion of committed facilities received from Central Bank of Malaysia under Restricted Committed Liquidity Facilities as HQLA Level 1 assets in accordance with the criteria specified by BNM. | The classification of the undrawn portion of committed facilities received from Central Bank of Malaysia under Restricted Committed Liquidity Facilities as HQLA Level 1 assets is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 2A - Sovereign, CB , PSE and MDB 20 percent Risk Weight Securities | This rule reclassifies the non-zero risk weight securities either issued or guaranteed by Sovereign, Central Bank, PSE and Multilateral Development Bank as HQLA Level 2A assets, in accordance with the criteria specified by BNM. | The classification of marketable zero and non-zero risk weight securities either issued or guaranteed by foreign sovereigns, central banks and multinational development banks as HQLA Level 2A assets is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 2A - Corporate Debt Securities | This rule reclassifies the corporate debt securities as HQLA Level 2A assets, in accordance with the criteria specified by BNM. | The classification of debt securities issued by corporates and covered bonds as HQLA Level 2A assets is configured as part of this rule.it also classifies | Paragraph 10.1 |
| LRM - BNM - HQLA Level 2A - Bankers Acceptance and Islamic Instruments | This rule reclassifies bankers acceptance, Cagamas Berhad debt securities, negotiable instruments of deposit and islamic negotiable instruments as HQLA level 2A assets in accordance with the criteria specified by BNM. This rule also reclassifies those securities that are guaranteed by sovereigns, multilateral development banks as HQLA Level 2A in accordance with the criteria specified by BNM. | The classification of debt securities issued by Cagmas Berhad as HQLA Level 2A assets is configured as part of this rule. It also classifies bankers acceptance, certificate of deposits, negotiable instruments of deposit and Islamic negotiable instruments as HQLA Level 2A assets as part of this rule. | Paragraphs 10.1, 10.2 and 10.3 |
| LRM - BNM - HQLA Level 2B - Corporate Debt Securities and RMBS Securities | This rule reclassifies the corporate debt securities and residential mortgage-backed securities as HQLA level 2B RMBS and level 2B Non-RMBS assets in accordance with the criteria specified by BNM. | The classification of residential mortgage backed security, issued by Cagmas Berhad as HQLA level 2B RMBS assets is configured as part of this rule. It also classifies the debt securities including commercial papers, issued by non-financial corporates as HQLA level 2B Non-RMBS I and HQLA level 2B RMBS II as part of this rule. | Paragraph 10.1 |
| LRM - BNM - Bank Own Assets - Meets HQLA Operational Requirements Flag Update | This rule identifies whether bank's own assets, both unencumbered assets as well as those placed as collateral, meet the operational requirements prescribed by BNM guidelines, except for being unencumbered in the case of placed collateral. In case of unencumbered assets, it updates the Meets HQLA Operational Requirements Flag. In case of placed collateral, it updates the Meets HQLA Operational Requirements on Unwind Flag. | The identification of whether an asset owned by the bank meets the operational requirements set forth by BNM for its inclusion in the stock of HQLA is configured as part of this rule. | Paragraphs 11 and 12 |
| LRM - BNM - Mitigants - Meets HQLA Operational Requirements Flag Update | This rule identifies whether a mitigants meets the operational requirements prescribed by BNM guidelines, to be considered for inclusion in the stock of HQLA. It updates the Meets HQLA Operational Requirements Flag for such mitigants. | The identification of whether a collateral received from a counterparty, that is further placed as collateral, meets the operational requirements set forth by BNM on unwind is configured as part of this rule. | Paragraphs 11 and 12 |
| LRM - BNM - Re-hypothecated Mitigants - Meets HQLA Operational Requirements Flag Update | This rule identifies whether a re-hypothecated mitigants meets the operational requirements prescribed by BNM guidelines, except for being unencumbered. It updates the Meets HQLA Operational Requirements on Unwind Flag for such mitigants. | The identification of whether the collateral received from counterparty meets the operational requirements set forth by BNM is configured as part of this rule. | Paragraphs 11 and 12 |
| LRM - BNM - Instruments - Eligible High Quality Liquid Assets Flag Update | This computation rule updates the HQLA Eligibility Flag for bank’s own unencumbered assets classified as HQLA that fulfill the HQLA operational requirements and therefore can be included in the stock of HQLA. It also updates the Eligible HQLA on Unwind flag for all assets placed as collateral that are classified as HQLA that fulfill the HQLA operational requirements on unwind and therefore are to be unwound. | The identification of whether a bank's asset classified as an HQLA, meets all the operational criteria and is therefore eligible to be included in the stock of HQLA is configured as part of this rule. | Paragraphs 11 and 12 |
| LRM - BNM - Mitigants - Eligible High Quality Liquid Assets Flag Update | This computation rule updates the HQLA Eligibility Flag for mitigants classified as HQLA that fulfill the HQLA operational requirements prescribed by BNM guidelines, and therefore can be included in the stock of HQLA. | The identification of whether the collateral received from counterparty, classified as an HQLA, meets all the operational criteria and is therefore eligible to be included in the stock of HQLA is configured as part of this rule. | Paragraphs 11 and 12 |
| LRM - BNM - Level 1 Stock Adjustment - Deduction | This rule identifies all secured funding and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured funding transactions, where the collateral posted is a non-level 1 HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the amount received. In case of asset exchange transactions, where the collateral posted is a non-level 1 HQLA and the collateral received in a level 1 HQLA the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. | The identification of secured funding and asset exchange transactions required to be unwound and the amount to be deducted from the stock of level 1 assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 1 Stock Adjustment - Addition | This rule identifies all secured lending and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured lending transactions, where the collateral received is a non-level 1 HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the amount paid. In case of asset exchange transactions, where the collateral received is a non-level 1 HQLA and the collateral posted in a level 1 HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. | The identification of secured lending and asset exchange transactions required to be unwound and the amount to be added to the stock of level 1 assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 2A Stock Adjustment - Deduction | This rule identifies all secured lending and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured lending transactions, where the collateral received is a level 2A HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. In case of asset exchange transactions, where the collateral posted is an HQLA and the collateral received is a level 2A asset, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. | The identification of secured lending and asset exchange transactions required to be unwound and the amount to be deducted from the stock of level 2A assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 2A Stock Adjustment - Addition | This rule identifies all secured funding and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured funding transactions, where the collateral posted is a level 2A HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. In case of asset exchange transactions, where the collateral received is an HQLA and the collateral posted is a level 2A asset, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. | The identification of secured funding and asset exchange transactions required to be unwound and the amount to be added to the stock of level 2A assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 2B RMBS Stock Adjustment - Deduction | This rule identifies all secured lending and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured lending transactions, where the collateral received is a level 2B RMBS HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. In case of asset exchange transactions, where the collateral posted is an HQLA and the collateral received is a level 2B RMBS asset, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. | The identification of secured lending and asset exchange transactions required to be unwound and the amount to be deducted from the stock of level 2B RMBS assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 2B RMBS Stock Adjustment - Addition | This rule identifies all secured funding and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured funding transactions, where the collateral posted is a level 2B RMBS HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. In case of asset exchange transactions, where the collateral received is an HQLA and the collateral posted is a level 2B RMBS asset, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. | The identification of secured funding and asset exchange transactions required to be unwound and the amount to be added to the stock of level 2B RMBS assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 2B(I) Non-RMBS Stock Adjustment - Deduction | This rule identifies all secured lending and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured lending transactions, where the collateral received is a level 2B I Non-RMBS HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. In case of asset exchange transactions, where the collateral posted is an HQLA and the collateral received is a level 2B I Non-RMBS asset, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. | The identification of secured lending and asset exchange transactions required to be unwound and the amount to be deducted from the stock of level 2B I Non-RMBS assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 2B(I) Non-RMBS Stock Adjustment - Addition | This rule identifies all secured funding and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured funding transactions, where the collateral posted is a level 2B I Non-RMBS HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. In case of asset exchange transactions, where the collateral received is an HQLA and the collateral posted is a level 2B I Non-RMBS asset, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. | The identification of secured funding and asset exchange transactions required to be unwound and the amount to be added to the stock of level 2B I Non-RMBS assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 2B(II) Non-RMBS Stock Adjustment - Deduction | This rule identifies all secured lending and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured lending transactions, where the collateral received is a level 2B II Non-RMBS HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. In case of asset exchange transactions, where the collateral posted is an HQLA and the collateral received is a level 2B II Non-RMBS asset, the type of adjustment to the stock of HQLA due to such an unwind is updated as deduction of the collateral received. | The identification of secured lending and asset exchange transactions required to be unwound and the amount to be deducted from the stock of 2B II Non-RMBS assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - Level 2B(II) Non-RMBS Stock Adjustment - Addition | This rule identifies all secured funding and asset exchange transactions involving HQLA that mature within the LCR horizon which are, therefore, required to be unwound and reclassifies them to the appropriate adjustment rule. In case of secured funding transactions, where the collateral posted is a level 2B II Non-RMBS HQLA, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. In case of asset exchange transactions, where the collateral received is an HQLA and the collateral posted is a level 2B II Non-RMBS asset, the type of adjustment to the stock of HQLA due to such an unwind is updated as addition of the collateral posted. | The identification of secured funding and asset exchange transactions required to be unwound and the amount to be added to the stock of 2B II Non-RMBS assets due to such an unwind is configured as part of this rule. | Paragraph 10.6 |
| LRM - BNM - HQLA Level 1 - Cash and Central Bank Reserve | This rule reclassifies cash, central bank reserves as HQLA Level 1 assets in accordance with the criteria specified by BNM. | The classification of cash and central bank reserves as HQLA level 1 asset is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 1 - Sovereign, CB , PSE and MDB Issued Zero Risk Weight Securities | This rule reclassifies zero risk weight securities issued by central banks, sovereigns, Public Sector Enterprises, International Organizations and multilateral development banks as HQLA Level 1 assets, in accordance with the criteria specified by BNM. | The classification of marketable zero risk weight securities, issued by foreign sovereigns, central banks and multinational development banks as HQLA Level 1 assets is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 1 - Sovereign, CB , PSE and MDB Guaranteed Zero Risk Weight Securities | This rule reclassifies zero risk weight securities guaranteed by central banks, sovereigns, Public Sector Enterprises, International Organizations and multilateral development banks as HQLA Level 1 assets, in accordance with the criteria specified by BNM. | The classification of marketable zero risk weight securities, guaranteed by foreign sovereigns, central banks and multinational development banks as HQLA Level 1 assets is configured as part of this rule. | Paragraph 10.1 |
| LRM - BNM - HQLA Level 1 - Sec by Sovereign and CB with Non-Zero Risk Weight in Domestic Currencies | This rule reclassifies non-zero risk weight securities issued by sovereigns and central banks, denominated in their local currency as HQLA Level 1 assets, in accordance with the criteria specified by BNM. | The classification of marketable securities, issued by non-zero risk weight foreign sovereigns, central banks and multinational development banks, denominated in their local currency as HQLA Level 1 assets is configured as part of this rule. | Paragraph 10.1 |