{"data":{"id":"us/12-cfr-1240.51","jurisdiction":"us","citation":"12 CFR 1240.51","heading":"Introduction and exposure measurement.","body":"(a) General. (1) To calculate its risk-weighted asset amounts for equity exposures, an Enterprise must use the Simple Risk-Weight Approach (SRWA) provided in § 1240.52.\n(2) An Enterprise must treat an investment in a separate account (as defined in § 1240.2) as if it were an equity exposure to an investment fund.\n(b) Adjusted carrying value. For purposes of §§ 1240.51 and 1240.52, the adjusted carrying value of an equity exposure is:\n(1) For the on-balance sheet component of an equity exposure, the Enterprise's carrying value of the exposure;\n(2) [Reserved]\n(3) For the off-balance sheet component of an equity exposure that is not an equity commitment, the effective notional principal amount of the exposure, the size of which is equivalent to a hypothetical on-balance sheet position in the underlying equity instrument that would evidence the same change in fair value (measured in dollars) given a small change in the price of the underlying equity instrument, minus the adjusted carrying value of the on-balance sheet component of the exposure as calculated in paragraph (b)(1) of this section; and\n(4) For a commitment to acquire an equity exposure (an equity commitment), the effective notional principal amount of the exposure is multiplied by the following conversion factors (CFs):\n(i) Conditional equity commitments with an original maturity of one year or less receive a CF of 20 percent.\n(ii) Conditional equity commitments with an original maturity of over one year receive a CF of 50 percent.\n(iii) Unconditional equity commitments receive a CF of 100 percent.","path":["Title 12—Banks and Banking","CHAPTER XII—FEDERAL HOUSING FINANCE AGENCY","SUBCHAPTER C—ENTERPRISES","PART 1240—CAPITAL ADEQUACY OF ENTERPRISES","Subpart D—Risk-Weighted Assets—Standardized Approach"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-12.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:16Z","sha256":"d841d093abc1441390c798b6cb072e499c6b78d3b32cab71b870da3b778c2035","source_id":"us-cfr","stale":true,"prev":"us/12-cfr-1240.46","next":"us/12-cfr-1240.52"},"notice":"GroundRules: Original legal text. Not legal advice."}