Entire Section

  • COB 12.5 Management of financial resources COB 12.5 Management of financial resources

    • General duty

      • COB 12.5.1

        An Operator of a Scheme must ensure:
        (a) that the financial resources of the Scheme are managed soundly and prudently; and
        (b) that there are sufficient liquid assets in the Scheme to meet:
        (i) the payment of Member benefits; and
        (ii) expenses and other charges relating to the operation of the Scheme.
        Derived from DFSA RMI261/2019 (Made 18th December 2019). [VER35/01-20]

    • Policies and strategies

      • COB 12.5.2

        (1) The Operator of a Scheme must ensure that there are well documented policies and strategies to meet the requirements in COB Rule 12.5.1, which include:
        (a) maintaining appropriate liquid buffers (including any reserves) and limits on illiquid assets; and
        (b)access to other resources (such as lines of credit).
        (2) The policies and strategies referred to in (1) must take into account, among other things:
        (a) the nature of the liquidity of the underlying investments in which Member contributions and earnings are invested;
        (b) if the underlying investments are securities traded on an exchange, liquidity on the exchange;
        (c) the benefit Payment Schedule, including any contingencies;
        (d) reserves established to meet fees, charges and any other outgoings of the Scheme; and
        (e) any other factors that may potentially affect the liquidity of the assets available for the payment of Member benefits.
        Derived from DFSA RMI261/2019 (Made 18th December 2019). [VER35/01-20]

      • COB 12.5.3

        The Operator of a Scheme must ensure that the Administrator adopts and implements appropriate mechanisms to:
        (a) measure, monitor, stress-test and manage the policies and strategies referred to in COB Rule 12.5.2;
        (b) assess whether the policies and strategies are adequate and are operating as intended in both normal and stressed conditions; and
        (c) address any gaps and failures identified.
        Derived from DFSA RMI261/2019 (Made 18th December 2019). [VER35/01-20]

      • COB 12.5.4

        The Operator of a Scheme must:
        (a) ensure that there are:
        (i) clear measures to identify and address liquidity stresses arising within the Scheme; and
        (ii) clear triggers to require the exercise of those measures; and
        (b) report promptly to the DFSA if any liquidity stresses are identified, and any action that is taken or to be taken.
        Derived from DFSA RMI261/2019 (Made 18th December 2019). [VER35/01-20]