17. Transition
Phase-in for Standardized Approach Treatment of Equity Exposures
17.1 The risk weight treatment described in paragraph 7.50 will be subject to a five-year linear phase-in arrangement from 1 January 2023. For speculative unlisted equity exposures, the applicable risk weight will start at 100% and increase by 60 percentage points at the end of each year until the end of Year 5. For all other equity holdings, the applicable risk weight will start at 100% and increase by 30 percentage points at the end of each year until the end of Year 5.
Phase-in for the Removal of the Internal Ratings-Based Approach for Equity Exposures
17.2 The requirement to use the standardized approach for equity exposures in paragraph 10.41 will be subject to a five-year linear phase-in arrangement from 1 January 2023. During the phase-in period, the risk weight for equity exposures will be the greater of:
(1) The risk weight as calculated using the internal ratings-based approach that applied to equity exposures prior to 1 January 2023; and
(2) The risk weight set for the linear phase-in arrangement under the standardized approach for credit risk (see paragraph 17.1 above).