PIB 9.2.7 Guidance

Past version: effective from 01/01/2015 - 31/12/2017
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1. An Authorised Firm should set limits to control its liquidity risk exposure and vulnerabilities. Limits and corresponding escalation procedures should be reviewed regularly. Limits should be relevant to the business in terms of its location, complexity of activity, nature of products, currencies and markets served. If an Authorised Firm breaches a liquidity risk limit, it should implement a plan to review its exposure and reduce it to a level that is within the limit.
2. An Authorised Firm should actively manage its collateral positions, differentiating between encumbered and unencumbered assets. An Authorised Firm should monitor the legal entity and physical location where collateral is held and how quickly the collateral may be used.
[Added] DFSA RM148/2014 (Made 1st January 2015). [VER23/01-15]