Entire Section

  • PIB A9.1 PIB A9.1 Application for a Global Liquidity Concession

    • PIB A9.1.1 PIB A9.1.1

      (1) This Rule applies to an Authorised Firm carrying on business in or from the DIFC through a Branch that applies for a global liquidity concession under PIB Rule 9.3.2.
      (2) The Authorised Firm must demonstrate to the DFSA that:
      (a) its Branch complies with all applicable liquidity systems and controls requirements in sections PIB 9.2 and PIB 9.2A;
      (b) its head office is established in a jurisdiction where there are no legal constraints imposed by the home supervisor or any other authority on the provision of liquidity to its branch; and
      (c) its head office is subject to equivalent or more restrictive liquidity requirements, than those imposed by the DFSA.
      (3) The DFSA may, when considering an application from the Authorised Firm for a global liquidity concession, impose additional or alternative conditions to those specified in (2) or disapply a condition in (2).
      [Added] DFSA RM148/2014 (Made 1st January 2015). [VER23/01-15]

      • PIB A9.1.1 Guidance

        1. An application for a global liquidity concession pursuant to PIB Rule 9.3.2 should include at least the following:
        a. a clear description of the home supervisor's requirements for managing, monitoring and controlling liquidity risk;
        b. a clear description of the systems and controls used by the head office to ensure the adequacy of the Branch's liquidity;
        c. a written assurance from the Authorised Firm's head office that it will:
        i. ensure that adequate liquidity is available at all times to support the branch;
        ii. notify the DFSA, at the same time as it notifies its home supervisor, of any material issues concerning its exposure to Liquidity Risk and issues in relation to its compliance with applicable liquidity limits, including its liquidity coverage ratio; and
        iii. in the event of a liquidity crisis, provide the DFSA with all relevant information on the whole Authorised Firm's liquidity, and a list of any known constraints on the head office, legal or otherwise, to providing the branch with liquidity.
        d. a notification from the Authorised Firm's home supervisor:
        i. expressing no objection to the branch obtaining the DFSA's liquidity concession or acknowledging the branch application to the DFSA for a global liquidity concession; and
        ii. providing information about, and confirming, the quality of Liquidity Risk systems and controls and the liquidity exposures at the Authorised Firm's head office.
        2. Under PIB Rule A9.1.1(2)(b), the DFSA will consider liquidity transfer restrictions (e.g. ring-fencing measures, non-convertibility of local currency, foreign exchange controls) imposed under applicable laws, regulations or supervisory requirements in jurisdictions in which a banking group operates which affect the availability of liquidity by inhibiting the transfer of HQLA and fund flows within the Group.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]
        [Amended] DFSA RM148/2014 (Made 1st January 2015). [VER23/01-15]

    • PIB A9.1.2

      (1) An Authorised Firm that has been granted a global liquidity concession must provide the DFSA with ongoing assurance about its Liquidity Risk by:
      (a) submitting to the DFSA at least quarterly a copy of the LCR calculation for the Authorised Firm, as submitted by its head office to its home supervisor;
      (b) notifying the DFSA immediately of the results of every assessment which its home supervisor conducts which relates to the quality of liquidity systems and controls at its head office;
      (c) notifying the DFSA in writing immediately of any adverse finding or action taken by its home supervisor;
      (d) notifying the DFSA in writing immediately of any potential change in the branch funding strategy, business model or material potential change in its balance sheet structure; and
      (e) notifying the DFSA in writing immediately of any changes relating to its compliance with the conditions referred to in PIB Rule A9.1.1.
      (2) The DFSA may at any time, based on its assessment of the Liquidity Risk exposures of an Authorised Firm, by written notice adjust or exclude any of the requirements in (1), impose additional requirements or cancel the global liquidity concession granted to the Authorised Firm.
      [Added] DFSA RM148/2014 (Made 1st January 2015). [VER23/01-15]