23.1 This regulation shall be published in the Official Gazette in both Arabic and English and shall come into effect (1) one month from the date of publication.

23.2 A grandfathering scheme will apply to any breaches that are due to the change in regulation, as set out in this Article.

23.3 The ‘grandfathered basis' is equal to the breach recorded as of 31 December 2022 when applying the requirements of this regulation, deducted by the breach recorded as of the same date when applying the requirements of Circular No. 32/2013 regarding “Monitoring of Large Exposure Limits” and its annexes (including the “Guidelines to Monitoring of Large Exposures”). The aforementioned requirements include the change in capital base, large exposure limits, and calculation methods.

The grandfathered basis is tied to a specific exposure and counterparty, which will be referred to as the ‘grandfathered exposure', and cannot be used to apply grandfathering to any other exposures or counterparties. For the avoidance of doubt, where the aggregate of multiple exposures to the same counterparty (or Group Of Connected Counterparties) leads to a breach, the grandfathering applies to that specific group of exposures only.

The grandfathered basis is fixed and does not change over time.

23.4 The grandfathering basis will determine the ‘grandfathered amount', which is the amount by which a grandfathered exposure may be reduced when applying the requirements of this regulation. The grandfathered amount is determined by multiplying the grandfathered basis with the following percentage:

23.4.1 100%, upon this regulation coming into force until 30 December 2023;

23.4.2 75%, from 31 December 2023 until 30 December 2024;

23.4.3 50%, from 31 December 2024 until 30 December 2025;

23.4.4 25%, from 31 December 2025 until 30 December 2026;

23.4.5 0%, from 31 December 2026 and onwards.

On 31 December 2026, the grandfathering scheme will cease having any effect.

23.5 Article 3.5 and 3.6 of this regulation do not apply to the grandfathered amount; but apply fully to the exposures in breach after applying the grandfathering scheme.

23.6 The reporting requirements set out in Article 5 of this regulation fully apply to any grandfathered exposures. Banks that have grandfathered exposures will however be required to attach additional information to their regular reporting to the Central Bank providing an overview of:

23.6.1 The grandfathering basis as per Article 23.3;

23.6.2 The percentage applied for the current period as per Article 23.4;

23.6.3 The grandfathered amount as per Article 23.4;

23.6.4 The current exposure amount without deduction of the grandfathered amount;

23.6.5 The amount by which the above (Article 24.6.4) breaches the applicable limits;

23.6.6 The current exposure amount after deduction of the grandfathered amount;

23.6.7 The amount by which the above (Article 24.6.6) breaches the applicable limits.

The Central Bank may issue further instructions on how the above should be reported, including both in terms of content and in terms of format.

23.7 For interbank exposures, the grandfathering scheme set out above does not apply, and Banks must comply fully by 31 December 2023.