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PIB A9.2.4 Guidance

1. The requirements in Rules PIB A9.2.2 to PIB A9.2.4 are intended to ensure that the stock of HQLA is managed in such a way that the Authorised Firm can, and is able to demonstrate that it can, immediately use the assets as a source of contingent funds that is available to convert into cash to fill funding gaps between cash inflows and outflows at any time during the 30-day stress period, with no restriction on the use of the liquidity generated.
2. Under PIB Rule A9.2.3(a), the control of the HQLA may be evidenced either by:
(a) maintaining assets in a separate pool managed by the identified liquidity management function (typically the treasurer) with the sole intent to use it as a source of contingent funds; or
(b) demonstrating that the relevant function can liquidate the asset at any point in the 30-day stress period and that the proceeds are available to the function throughout the 30-day stress period without directly conflicting with a stated business or risk management strategy.
3. Operational capability to liquidate assets referred to in PIB Rule A9.2.3(b), requires procedures and appropriate systems to be in place. This includes providing the liquidity management function with access to all necessary information to liquidate any asset at any time. Liquidation of the asset should be executable operationally within the standard settlement period for the asset class in the relevant jurisdiction.
[Added] DFSA RM148/2014 (Made 1st January 2015). [VER23/01-15]