Module: | Primary Categories & SPPI Rules
Q5: A bank may not classify securities under Held to Maturity (HTM) if it intends to sell more than …… of the opening carrying value of the HTM portfolio to meet regulatory liquidity needs.
✅ Correct Answer: B
If a bank intends to sell securities to meet regulatory objectives and the value is "significant"—defined as more than five per cent of the opening carrying value of the HTM portfolio—those securities do not meet the criteria for HTM classification.
This threshold is frequently asked in Investment Classification MCQs.
This threshold is frequently asked in Investment Classification MCQs.