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Article 1: Definitions

C 163/2019 STA
  1. 1. Affiliate: An entity that, directly or indirectly, is controlled by, or is under common control with another entity. The term control as used herein shall mean the holding, directly or indirectly, of voting rights in another entity, or of the power to direct or cause the direction of the management of another entity.
  2. 2. Bank: A financial entity, which is authorized by the Central Bank to accept deposits as a Bank.
  3. 3. Board: The Bank’s Board of Directors.
  4. 4. Central Bank: The Central Bank of the United Arab Emirates.
  5. 5. Central Bank Law: Federal Law No (10) of 1980 concerning the Central Bank, the Monetary System and Organization of Banking as amended or replaced from time to time.
  6. 6. Central Bank regulations: Any resolution, regulation, circular, rule, standard or notice issued by the Central Bank.
  7. 7. Group: A group of entities that includes an entity (the 'first entity') and:
    1. a.any Parent of the first entity;
    2. b.any Subsidiary of the first entity or of any Parent of the first entity; and
    3. c.any Affiliate.
  8. 8. Higher Shari’a Authority: The Higher Shari’a Authority for Islamic banking and financial activities that was established by the Cabinet Resolution no. 2016 (1/و5/102) at the Central Bank.
  9. 9. Inherent risk: The risk existing if no controls or other mitigating factors are in place.
  10. 10. Islamic Financial Services: Shari’a compliant financial services offered by Islamic Banks and Conventional Banks offering Islamic banking products (Islamic Windows).
  11. 11. Operational risk: The risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk but excludes strategic and reputational risk.
  12. 12. Parent: An entity (the 'first entity') which:
    1. a.holds a majority of the voting rights in another entity (the 'second entity');
    2. b.is a shareholder of the second entity and has the right to appoint or remove a majority of the Board or managers of the second entity; or
    3. c.is a shareholder of the second entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the second entity;
      Or;
    4. d.If the second entity is a subsidiary of another entity which is itself a subsidiary of the first entity.
  13. 13. Residual risk: The risk exposure after controls are considered.
  14. 14. Risk appetite: The aggregate level and types of risk a Bank is willing to assume, decided in advance and within it risk capacity, to achieve its strategic objectives and business plan.
  15. 15. Risk governance framework: As part of the overall approach to corporate governance, the framework through which the Board and management establish and make decisions about the Bank’s strategy and approach to risk management; articulate and monitor adherence to the risk appetite and risks limits relative to the Bank’s strategy; and identify, measure, manage and control risks.
  16. 16. Risk limits: Specific quantitative measures that may not be exceeded, based on, for example, forward looking assumptions that allocate the Bank’s aggregate risk appetite to business lines, legal entities or management units within the Bank or Group in the form of specific risk categories, concentrations or other measures, as appropriate.
  17. 17. Risk Management function: Collectively, the systems, structures, policies, procedures and people that measure, monitor and report risk on a Bank-wide and, if applicable, Group-wide basis.
  18. 18. Senior Management: The executive management of the Bank responsible and accountable to the Board for the sound and prudent day-to-day management of the Bank, generally including, but not limited to, the chief executive officer, chief financial officer, chief risk officer and heads of the compliance and internal audit functions.
  19. 19. Subsidiary: An entity (the 'first entity') is a subsidiary of another entity (the 'second entity') if the second entity:
    1. a.holds a majority of the voting rights in the first entity;
    2. b.is a shareholder of the first entity and has the right to appoint or remove a majority of the Board or managers of the first entity; or
    3. c.is a shareholder of the first entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the first entity;
      Or;
    4. d.If the first entity is a subsidiary of another entity that is itself a subsidiary of the second entity.