73.Significant investments in commercial entities are defined as investments in commercial entities that are, on an individual basis, greater than or equal to 10% of the bank’s CET1 capital (after the application of all regulatory deductions). The amount in excess of the threshold of 10% (for each individual investment) will be risk weighted at 1250%.

74.If the aggregate of the amount of such significant investments that is not in excess of the threshold (i.e. amount of such investments not risk weighted at 1250%) is greater than 25% of the bank’s CET1 capital (after the application of all regulatory deductions), the amount in excess of 25% must also be risk weighted at 1250%. The amount in excess will be allocated to individual investments in a proportionate basis (refer to Appendix 3 in Guidance for Capital Adequacy of Banks in the UAE for an illustrative example).

75.Amounts below the thresholds that are not risk weighted at 1250% are to be risk weighted as follows:

1. i.Amounts below the thresholds that are in the banking book are to be risk weighted as per the credit risk rules (i.e. investments that are not listed will be risk weighted at 150% and investments that are listed will be risk weighted at 100%).
2. ii.Amounts below the thresholds that are in the trading book are to be risk weighted as per the market risk rules.