• PRU A10.1 PRU A10.1 Application for a global liquidity concession

    • PRU A10.1.1 PRU A10.1.1

      (1) This Rule applies to an Authorised Person carrying on business in or from the ADGM through a Branch that applies for a global liquidity concession under Rule 9.3.2.
      (2) The Authorised Person must demonstrate to the Regulator that:
      (a) its Branch complies with all applicable liquidity systems and controls requirements in section 9.2;
      (b) its head office is established in a jurisdiction where there are no legal constraints imposed by the home supervisor or any other authority on the provision of liquidity to its Branch; and
      (c) its head office is subject to equivalent or more restrictive liquidity requirements, than those imposed by the Regulator.
      (3) The Regulator may, when considering an application from the Authorised Person for a global liquidity concession, impose additional or alternative conditions to those specified in (2) or disapply a condition in (2).

      • Guidance

        1. An application for a global liquidity concession pursuant to 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 Person's head office that it will:
        i. ensure that adequate liquidity is available at all times to support the Branch;
        ii. notify the Regulator, 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 Regulator with all relevant information on the whole Authorised Person's liquidity, and a list of any known constraints on the head office, legal or otherwise, providing the Branch with liquidity.
        d. a notification from the Authorised Person's home supervisor:
        i. expressing no objection to the Branch obtaining the Regulator's liquidity concession or acknowledging the Branch application to the Regulator 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 Person's head office.
        2. Under Rule A9.1.1(2)(b), the Regulator 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.

    • PRU A10.1.2

      (1) An Authorised Person that has been granted a global liquidity concession must provide the Regulator with ongoing assurance about its Liquidity Risk by:
      (a) submitting to the Regulator at least quarterly a copy of the LCR calculation for the Authorised Person, as submitted by its head office to its home supervisor;
      (b) notifying the Regulator immediately of the results of every assessment which its home supervisor conducts which relates to the quality of liquidity systems and controls at its head office;
      (c) notifying the Regulator in writing immediately of any adverse finding or action taken by its home supervisor;
      (d) notifying the Regulator in writing immediately of any potential change in the Branch funding strategy, business model or material potential change in its balance sheet structure; and
      (e) notifying the Regulator in writing immediately of any changes relating to its compliance with the conditions referred to in Rule A9.1.1.
      (2) The Regulator may at any time, based on its assessment of the Liquidity Risk Exposures of an Authorised Person, by written notice adjust or exclude any of the requirements in (1), impose additional requirements or cancel the global liquidity concession granted to the Authorised Person.