Document ID: chunk:federal_register_of_legislation:F2023L01436:body:0:p6
Version: federal_register_of_legislation:F2023L01436
Segment Type: other
Provision Reference: 
Character Range: 13513–16448

the market standard for the particular instrument, and (ii) five business days after the date on which the parties enter into the transaction.
    Netting means the process under a netting agreement of combining all relevant outstanding transactions between two counterparties and reducing them to a single net sum for a party to either pay or receive (refer to Attachment H of APS 112).
    Notional principal amount means the face value or gross amount of a given off-balance sheet transaction and not the fair value. Absolute values should be reported.
    Number of counterparties means the total number (count) of counterparties, each as a separate legal entity, with a non-zero notional principal amount in each credit rating grade.
    Off-balance sheet exposures means exposures that need to be converted to a CEA before they can be risk-weighted. Prior to the adoption of International Financial Reporting Standards (IFRS) for reporting periods beginning on or after 1 January 2005, some items, e.g. derivatives for accounting purposes, were treated as off-balance sheet. After the adoption of IFRS some of these items for accounting purposes were brought on-balance sheet. For the purposes of this Reporting Standard, continue to report items that were off-balance sheet before the adoption of IFRS as off-balance sheet.
    Over-the-counter (OTC) derivative transaction means a customised, privately negotiated, risk-shifting agreement, the value of which is derived from the value of an underlying asset.
    Potential future exposure, for the purposes of ARF 180.1, means the amount calculated to reflect the potential for the credit exposure of a market-related contract to exceed the current credit exposure over time. This is calculated under either the adjusted current exposure method (detailed in Attachment E of APS 180) or the standardised approach to counterparty credit risk (detailed in Attachment D of APS 180). Generally, the potential future exposure amount is a derived field in ARF 180.1. In some cases, however, the amount must be entered by the ADI.  Under the current exposure method, the potential future exposure amount for some off-balance sheet exposure types may consist of several discrete exposures, each potentially attracting different CCFs. The ADI must, by reference to Attachment E of APS 180, determine the appropriate CCF(s) to be applied to the exposure(s) to calculate the potential future exposure amount for that off-balance sheet exposure type and report the total as a single potential future exposure amount in ARF 180.1.
    Qualifying CCP (QCCP) means an entity that is licensed to operate as a CCP (including a licence granted by way of confirming an exemption), and is permitted by the CCP's regulator/supervisor to operate as such with respect to the products offered. The entity must be based and prudentially supervised in a jurisdiction where the relevant regulator/overseer