Explanation of the decision to calculate prudential standards.
The National Securities and Stock Market Commission has prepared an information note on the calculation of prudential standards in connection with the adoption of Decision No. 824 of 16.11.2017 on approval of amendments to Regulation No. 1597 “On prudential standards for professional activities in the stock market and requirements for a risk management system”. Decision No. 824 amended Regulations No. 1597 (hereinafter the Regulation).
In accordance with clause 2 of Chapter 7 of Section III of the Regulations, any person to whom the institution has claims submitted in the form of the assets of the institution specified in clause 5 of Section 7 of Section III of this Regulation is considered to be the counterparty of the institution for calculating the concentration of credit risk. If there are investment funds in the assets of the securities trader, several mutual funds with different EGRISI codes that are managed by one AMC are calculated for each unit in order to calculate the concentration of credit risk by the counterparty for the securities trader.
In accordance with paragraph 5 of Ch. 7 of Section III of the Regulations for the assets that make up the institution’s requirements for the counterparty include, in particular, accounts receivable. When determining the amount of assets that make up a requirement for a counterparty, the amount of receivables is reduced by the amount of the reserve for doubtful debts formed for such a debt.
For the purpose of calculating the concentration of credit risk concentration for assets that constitute an institution’s requirement for a counterparty in the form of a receivable, cash on current accounts and deposits with banks, as well as income accrued thereon, are included.
With explanations of the Commission on other points of the Regulations, you can find here.
A source: National Securities and Stock Market Commission.