General corporate — unrated small- and m

General corporate – unrated small- and medium-sized enterprise exposures

1. An exposure to an SME is an exposure to a corporate counterparty with total consolidated annual revenue of less than $75 million. Where an ADI has an exposure to an SME that is part of a corporate group, it may be treated as an SME exposure provided the total consolidated annual revenue for the group is less than $75 million. Where a corporate counterparty’s total consolidated annual revenue cannot be determined, and the exposure is less than $5 million, the ADI may treat the exposure as SME.

2. An ADI must apply the risk weights in Table 12 to its unrated SME exposures.

3. Risk weights for unrated SME exposures

1. To be risk-weighted as SME retail, the following criteria must be satisfied:
   1. the exposure is in the form of a small business lending facility or commitment. Derivatives and other securities such as bonds and equities, and exposures secured by residential property are excluded from this category; and
   2. the maximum aggregated exposure to the SME counterparty is less than $1.5 million. For this purpose:
      1. aggregated exposure means the gross amount, excluding the application of any credit risk mitigation. For off-balance sheet exposures, the gross amount must be calculated after applying CCFs; and
      2. the SME counterparty means either a single SME, or where the SME forms part of a corporate group, the broader group.