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Article 1: Definitions

C 153-2018 STA Effective from 27/6/2018
  1. 1. Affiliate: An entity that, directly or indirectly, controls, is controlled by or is under common control with another entity. The term control as used herein shall mean the holding, directly or indirectly, of voting rights in another entity or of the power to direct or cause the direction of the management of another entity.
  2. 2. Bank: A financial entity, which is authorized by the Central Bank to accept deposits as a bank.
  3. 3. Board: The Bank’s board of directors.
  4. 4. Central Bank: The Central Bank of the United Arab Emirates.
  5. 5. Central Bank Law: Union Law No (10) of 1980 concerning the Central Bank, the Monetary System and Organization of Banking as amended or replaced from time to time.
  6. 6. Central Bank regulations: Any resolution, regulation, circular, rule, standard or notice issued by the Central Bank.
  7. 7. Group: A group of entities that includes an entity (the 'first entity') and:
    1. a. any Parent of the first entity;
    2. b. any Subsidiary of the first entity or of any Parent of the first entity; and
    3. c. any Affiliate.
  8. 8. Parent: An entity (the 'first entity') which:
    1. a. holds a majority of the voting rights in another entity (the 'second entity');
    2. b. is a shareholder of the second entity and has the right to appoint or remove a majority of the Board or managers of the second entity; or
    3. c. is a shareholder of the second entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the second entity;

      Or;

    4. d.  if the second entity is a subsidiary of another entity which is itself a subsidiary of the first entity.
  9. 9. Risk appetite: The aggregate level and types of risk a bank is willing to assume, decided in advance and within its risk capacity, to achieve its strategic objectives and business plan.
  10. 10. Risk capacity: The maximum amount of risk a bank is able to assume given its capital base, risk management and control measures, as well as its regulatory constraints.
  11. 11. Risk culture: A bank’s norms, attitudes and behaviors related to risk awareness, risk taking and risk management and controls that shape decisions on risks, influence the decisions of management and employees during day-to-day activities and is reflected in the risks they assume.
  12. 12. Risk governance framework: As part of the overall approach to corporate governance, the framework through which the board and management establish and make decisions about the bank’s strategy and approach to risk management; articulate and monitor adherence to the risk appetite and risks limits relative to the Bank’s strategy; and identify, measure, manage and control risks.
  13. 13. Risk limits: Specific quantitative measures that must not be exceeded based on, for example, forward looking assumptions that allocate the bank’s aggregate risk appetite to business lines, legal entities or management units within the bank or group in the form of specific risk categories, concentrations or other measures as appropriate.
  14. 14. Risk management function: Collectively, the systems, structures, policies, procedures and people that measure, monitor and report risk on a bank and, if applicable, group-wide basis.
  15. 15. Risk profile: Point in time assessment of the bank’s gross (before the application of any mitigants) or net (after taking into account mitigants) risk exposures aggregated within and across each relevant risk category based on current or forward-looking assumptions.
  16. 16. Senior management: The executive management of the bank responsible and accountable to the board for the sound and prudent day-to-day management of the bank, generally including, but not limited to, the chief executive officer, chief financial officer, chief risk officer and heads of the compliance and internal audit functions.
  17. 17. Subsidiary: An entity (the 'first entity') is a subsidiary of another entity (the 'second entity') if the second entity:
    1. a. holds a majority of the voting rights in the first entity;
    2. b. is a shareholder of the first entity and has the right to appoint or remove a majority of the board or managers of the first entity; or
    3. c. is a shareholder of the first entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the first entity;

      Or;

    4. d. if the first entity is a subsidiary of another entity that is itself a subsidiary of the second entity.