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]