(1) This Rule applies where the DFSA by written notice under Article 84H of the Law requires an Authorised Firm to hold and maintain a minimum amount of Loss Absorbing Capacity (LAC).
(2) The DFSA will issue a LAC requirement only in relation to an Authorised Firm that is not a Branch.
(3) The Authorised Firm shall maintain the specified amount of LAC at all times from the date specified by the DFSA in the notice.
(4) The LAC requirement:
(a) shall include the Authorised Firm’s own funds and Eligible Liabilities, whether issued externally or internally within its Group;
(b) may be applied on an unconsolidated balance sheet basis to an individual entity or on a consolidated balance sheet basis to two or more entities that the DFSA groups together;
(c) may specify criteria that must be met by Debt Instruments or other instruments issued for the purposes of complying with the requirement;
(d) may require eligible instruments to contain contractual terms designed to promote recognition of their loss-absorbing characteristics and their eligibility to be the subject of the exercise of the Bail-In Tool.
Derived from DFSA RMI283/2020 (Made 16th December 2020). [VER1/04-21]