Entire Section

  • PIB 9.3.12 PIB 9.3.12

    (1) An Authorised Firm must maintain a Net Stable Funding Ratio (NSFR) of at least 100%.
    (2) The NSFR under (1) must be calculated using the formula:
    NSFR = ASF x 100
    RSF

    where:

    (a) ASF (Available Stable Funding) is the amount, calculated in accordance with PIB Rule A9.4.1, representing the relative stability of an Authorised Firm's available funding sources; and

    (b) RSF (Required Stable Funding) is the amount, calculated in accordance with PIB Rule A9.4.2, representing the Liquidity Risk profile of an Authorised Firm's assets and OBS Exposures (or potential liquidity Exposures).
    Derived from DFSA RM209/2017 (Made 25th October 2017). [VER30/01-18]

    • PIB 9.3.12 Guidance

      1. The objective of the NSFR Requirement is to require an Authorised Firm to maintain a stable funding profile relative to the composition of its assets and off-balance sheet activities. A stable funding profile reduces the likelihood that disruptions to an Authorised Firm's regular sources of funding will erode its liquidity position in a way that would increase the risk of its failure and potentially lead to broader systemic stress. The NSFR Requirement limits over-reliance on short-term wholesale funding, encourages better assessment of funding risk across all on- and off-balance sheet items and promotes funding stability.
      2. PIB Section A9.4 of App9 sets out how an Authorised Firm's Available Stable Funding (ASF) and Required Stable Funding (RSF) are to be calculated.
      3. If the DFSA considers that the Financial Services Regulator of the home state of an Authorised Firm that is a Branch has not fully implemented the Basel III NSFR requirements, it may use its power under Article 75A of the Regulatory Law to require the Authorised Firm to comply with appropriate NSFR requirements.
      Derived from DFSA RM209/2017 (Made 25th October 2017). [VER30/01-18]