Regulation on Bank Capital Adequacy

ANNEX IIFormula for calculating the operational risk capital charge under BIA is:KBIA = {∑(GI1…n x α)}/nWhereKBIA = capital charge under BIAGI = annual gross income of the banks, where positive, over the preceding three yearsn = number of the preceding three years where annual gross income is positiveα = 15%The formula for calculating the operational risk capital charge under SA:KSA = {∑years 1-3 max[∑(GI1-8 x β1-8), 0]}/3WhereKSA = capital charge under SAGI1-8 = annual gross income in a given year for each of the eight business linesΒ1-8 = a fixed beta factor (as defined in Annex III).ANNEX IIIBusiness line List of activities PercentageUnderwriting of financial instruments and/or placing offinancial instruments on a firm commitment basisCorporate financeServices related to underwritingInvestment adviceAdvice to undertakings on capital structure, industrialstrategy and related matters and advice and servicesrelating to the mergers and the purchase of undertakings18%Investment research and financial analysis and otherforms of general recommendation relating to transactionsin financial instruments