Commercial real estate asset class
An Authorised Person must apply a 100% risk weight to any CR Exposure in the commercial real estate asset class.
An Authorised Person must apply a risk weight of 150% to Exposures, including Exposures in the form of Shares or Units in a Collective Investment Fund, that are associated with particularly high risks.
For the purposes of Rule 4.12.19, Exposures with particularly high risks must include the following Investments:(a) Investments in venture capital funds;(b) Investments in hedge funds or alternative investment funds, including but not limited to Private Equity Funds;(c) speculative immovable property financing; and(d) any Investments declared by the Regulator to constitute high risk for the purpose of this Rule.
When assessing whether an Exposure other than Exposures referred to in Rule 4.12.20 is associated with particularly high risks, an Authorised Person must take into account the following risk characteristics:(a) there is a high risk of loss as a result of a default of the obligor; and(b) it is impossible to assess adequately whether the Exposure falls under (a).