PIB 9.2.1

(1) An Authorised Firm must establish and maintain a Liquidity Risk policy.
(1A) An Authorised Firm must ensure the policy is in writing and is approved at least annually by its Governing Body.
(1B) The policy must set out the level of Liquidity Risk the Authorised Firm is willing to tolerate, which must be in line with its business objectives, strategy and overall risk tolerance.
(2) The policy must include systems and controls for intra-day daily, short-term, medium-term and long-term management of Liquidity Risk appropriate to the nature, scale and complexity of the activities conducted by the firm.
(3) The systems and controls referred to in (2) must include:
(a) a system for identifying and assessing Liquidity Risk in accordance with PIB Rule 9.2.4.
(b) a system for the measurement and monitoring of Liquidity Risk using a robust and consistent method which enables the Authorised Firm to implement the requirements set out in PIB Rule 9.2.5;
(c) a system for controlling Liquidity Risk which enables the Authorised Firm to implement the requirements set out in PIB Rule 9.2.6;
(d) a system for collateral management and asset encumbrance which is able to adequately identify, monitor and manage the risks associated with these activities in accordance with PIB Rule 9.2.8;
(e) a system for adequate allocation of liquidity costs, benefits and risks that meets the requirements set out in PIB Rule 9.2.9; and;
(f) a system to manage intra-day liquidity positions effectively and meet the requirements in PIB Rule 9.2.10.
(4) An Authorised Firm must ensure that it has risk management systems to implement the policy.
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]
[Amended] DFSA RM148/2014 (Made 1st January 2015). [VER23/01-15]
[Amended] DFSA RM209/2017 (Made 25th October 2017). [VER30/01-18]