Application Form - Large Exposure Approval: Parental Guarantee

Summary

This is an application form issued by the Jersey Financial Services Commission for banks seeking approval to exceed the 25% Large Exposure limit on agreed capital resources where the exposure is guaranteed by a parent bank. It is used together with a covering explanatory letter and is only available where the requested amount would not itself constitute a Large Exposure in respect of the guaranteeing parent bank.

• Section A - Large Exposure details: Requires the registered person's name and DC reference, customer name, details of any previous approval, requested amount, purpose, requested end date, adjusted capital base, agreed capital resources, current and prospective Large Exposure totals, and capital ratios before and after drawdown.
• Section B - Parental Guarantee: Requires the guaranteeing counterparty's name and parental status (intermediate or ultimate parent), its Tier 1 capital and Large Exposure Capital Base, the requested amount as a percentage of that base, details of the legal opinion supporting reliance on the guarantee, and risk weightings for both customer and guarantor.
• Supporting letter: Applicants must also submit a covering explanatory letter providing an overview of the request and any details not captured by the form, including details of connected parties on first application relating to a connection.

The form itself does not set out approval criteria or ongoing conduct rules; it operationalises the approval process described in Section 5.4 and Appendix III of the Codes of Practice for Deposit-taking Business, which registered banks should consult for the substantive requirements governing Large Exposures.

Key obligations

• A registered bank seeking JFSC approval for a Large Exposure exceeding 25% of agreed capital resources guaranteed by a parent bank must complete this application form.
• The application must be submitted together with a covering explanatory letter providing an overview of the request and any additional relevant details not captured by the form.
• On the first application relating to a connection, the registered person must provide details of connected parties by separate letter.
• The applicant must be prepared to provide a copy of the legal opinion regarding the guarantee or letter of transfer of assets if it is the first case of reliance on that opinion.

Applies to

banks, registered persons (deposit-taking businesses)