Liquidity (CRR)

1.

Institutions shall report the items referred to in the Reporting (CRR) Part of the PRA Rulebook, Title IV (The Net Stable Funding Ratio) and in Chapter 2 of the Liquidity Coverage Ratio Part of the PRA Rulebook to the competent authority in the reporting currency, regardless of the actual denomination of those items.

The reporting frequency shall be at least monthly for items referred to in Chapter 2 of the Liquidity Coverage Ratio Part of the PRA Rulebook and at least quarterly for items referred to in Title IV (The Net Stable Funding Ratio).

2.

An institution shall report separately to the competent authority the items referred to in the Reporting (CRR) Part of the PRA Rulebook, in Title IV (The Net Stable Funding Ratio) and in Chapter 2 of the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook, as appropriate, in accordance with the following:

1. (a) where items are denominated in a currency other than the reporting currency and the institution has aggregate liabilities denominated in such a currency which amount to or exceed 5% of the institution's or the single liquidity sub-group's total liabilities, excluding own funds and off-balance sheet items, reporting shall be done in the currency of denomination;
2. (c) where items are denominated in the reporting currency, and the aggregate amount of liabilities in other currencies than the reporting currency amounts to or exceeds 5% of the institution's or the single liquidity subgroup's total liabilities, excluding own funds and off-balance sheet items, the reporting shall be done in the reporting currency.

3.

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3a.

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[Note: This rule corresponds to Article 415 of the CRR as it applied immediately before revocation by the Treasury.]

1.

Institutions shall report the following as liquid assets unless excluded by paragraph 2 and only if the liquid assets fulfil the conditions in paragraph 3:

1. (a) cash and exposures to central banks to the extent that these exposures can be withdrawn at any time in times of stress. As regards deposits held with central banks (including the Bank of England and a central bank of a third country), institutions must have regard to any common understanding or agreement reached between the competent authority and central bank regarding the extent to which minimum reserves can be withdrawn in times of stress;
2. (b) other transferable assets that are of extremely high liquidity and credit quality;
3. (c) transferable assets representing claims on or guaranteed by:
1. (i) the central government of the United Kingdom, a region with fiscal autonomy to raise and collect taxes, or of a third country in the domestic currency of the central or regional government, if the institution incurs a liquidity risk in the United Kingdom or third country that it covers by holding those liquid assets;
2. (ii) central banks and non-central government public sector entities in the domestic currency of the central bank and the public sector entity;
3. (iii) the Bank for International Settlements, the International Monetary Fund and multilateral development banks;
4. (iv) the European Financial Stability Facility and the European Stability Mechanism;
4. (d) transferable assets that are of high liquidity and credit quality;
5. (e) standby credit facilities granted by central banks within the scope of monetary policy to the extent that these facilities are not collateralised by liquid assets and excluding emergency liquidity assistance;
6. (f) if the credit institution belongs to a network in accordance with legal or statutory provisions, the legal or statutory minimum deposits with the central credit institution and other statutory or contractually available liquid funding from the central credit institution.

2.

The following shall not be considered liquid assets:

1. (a) assets that are issued by a credit institution unless they fulfil one of the following conditions:
1. (i) they are bonds eligible for the treatment set out in Article 129(4) or (5) or asset backed instruments if demonstrated to be of the highest credit quality as set out in Chapter 2 of the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook;
2. (ii) they are CRR covered bonds other than those referred to in point (i) of this point;
3. (iii) the credit institution has been set up by the central or a regional government of the United Kingdom and that government has an obligation to protect the economic basis of the institution and maintain its viability throughout its lifetime; or the asset is explicitly guaranteed by that government; or at least 90% of the loans granted by the institution are directly or indirectly guaranteed by that government and the asset is predominantly used to fund promotional loans granted on a non-competitive, not for profit basis in order to promote that government's public policy objectives;
2. (b) assets that are provided as collateral to the institution under reverse repo and securities financing transactions and that are held by the institution only as a credit risk mitigant and that are not legally and contractually available for use by the institution;
3. (c) assets issued by any of the following:
1. (i) an investment firm;
2. (ii) an insurance undertaking;
3. (iii) a financial holding company;
4. (iv) a mixed financial holding company;
5. (v) any other entity that performs one or more of the Annex 1 activities as its main business.

3.

In accordance with paragraph 1, institutions shall report assets that fulfil the following conditions as liquid assets:

1. (a) the assets are unencumbered or stand available within collateral pools to be used for obtaining additional funding under committed or, where the pool is operated by a central bank, uncommitted but not yet funded credit lines available to the institution;
2. (b) the assets are not issued by the institution itself, by its parent or subsidiary institutions, or by another subsidiary of its parent institution or parent financial holding company;
3. (c) the price of the assets is generally agreed upon by market participants and can easily be observed in the market or the price can be determined by a formula that is easy to calculate on the basis of publicly available inputs and that does not depend on strong assumptions, as is typically the case for structured or exotic products;
4. (d) the assets are listed on a recognised exchange or they are tradable by an outright sale or via a simple repurchase agreement on repurchase markets; those criteria shall be assessed separately for each market.

The conditions referred to in points (c) and (d) of the first subparagraph shall not apply to the assets referred to in points (a), (e) and (f) of paragraph 1.

5.

Shares or units in CIUs may be treated as liquid assets, up to an absolute amount of GBP 440 million or the equivalent amount in domestic currency, in the portfolio of liquid assets of each institution, provided that the requirements laid down in Article 132(3) are met and that the CIU only invests in liquid assets as referred to in paragraph 1 of this Article, apart from derivatives to mitigate interest rate or credit or currency risk.

The use or potential use by a CIU of derivative instruments to hedge risks of permitted investments shall not prevent that CIU from being eligible for the treatment referred to in the first subparagraph of this paragraph. Where the value of the shares or units of the CIU is not regularly marked to market by the third parties referred to in points (a) and (b) of Article 418(4) and where an institution has not developed robust methodologies and processes for such valuation as referred to in Article 418(4), shares or units in that CIU shall not be treated as liquid assets.

6.

Where a liquid asset ceases to comply with the requirement for liquid assets as set out in this Article, an institution may nevertheless continue to consider it a liquid asset for an additional period of 30 days. Where a liquid asset in a CIU ceases to be eligible for the treatment set out in paragraph 5, the shares or units in the CIU may nevertheless be considered a liquid asset for an additional period of 30 days, provided that those assets do not exceed 10% of the CIU's overall assets.

[Note: This rule corresponds to Article 416 of the CRR as it applied immediately before revocation by the Treasury.]

The institution shall only report as liquid assets those holdings of liquid assets that meet the following conditions:

1. (a) they are appropriately diversified. Diversification is not required in terms of assets corresponding to points (a), (b) and (c) of Article 416(1);
2. (b) they are legally and practically readily available at any time during the next 30 days to be liquidated via outright sale or via a simple repurchase agreement on approved repurchase markets in order to meet obligations coming due. Liquid assets referred to in point (c) of Article 416(1) which are held in third countries where there are transfer restrictions or which are denominated in non-convertible currencies shall be considered available only to the extent that they correspond to outflows in the third country or currency in question, unless the institution has appropriately hedged the ensuing currency risk;
3. (c) the liquid assets are controlled by a liquidity management function;
4. (d) a portion of the liquid assets except those referred to in points (a), (c), (e) and (f) of Article 416(1) is periodically and at least annually liquidated via outright sale or via simple repurchase agreements on an approved repurchase market for the following purposes:
1. (i) to test the access to the market for these assets;
2. (ii) to test the effectiveness of its processes for the liquidation of assets;
3. (iii) to test the usability of the assets;
4. (iv) to minimise the risk of negative signalling during a period of stress;
5. (e) price risks associated with the assets may be hedged but the liquid assets are subject to appropriate internal arrangements that ensure that they are readily available to the treasury when needed and especially that they are not used in other ongoing operations, including:
1. (i) hedging or other trading strategies;
2. (ii) providing credit enhancements in structured transactions;
3. (iii) covering operational costs;
6. (f) the denomination of the liquid assets is consistent with the distribution by currency of liquidity outflows after the deduction of inflows.

[Note: This rule corresponds to Article 417 of the CRR as it applied immediately before revocation by the Treasury.]

1.

The value of a liquid asset to be reported shall be its market value, subject to appropriate haircuts that reflect at least the duration, the credit and liquidity risk and typical repo haircuts in periods of general market stress. The haircuts shall not be less than 15% for the assets referred to in point (d) of Article 416(1). If the institution hedges the price risk associated with an asset, it shall take into account the cash flow resulting from the potential close-out of the hedge.

2.

Shares or units in CIUs as referred to in Article 416(5) shall be subject to haircuts, looking through to the underlying assets as follows:

1. (a) 0% for the assets referred to in point (a) of Article 416(1);
2. (b) 5% for the assets referred to in points (b) and (c) of Article 416(1);
3. (c) 20% for the assets referred to in point (d) of Article 416(1).

3.

The look-through approach referred to in paragraph 2 shall be applied as follows:

1. (a) where the institution is aware of the underlying exposures of a CIU, it may look through to those underlying exposures in order to assign them to points (a) to (d) of Article 416(1);
2. (b) where the institution is not aware of the underlying exposures of a CIU, it shall be assumed that the CIU invests, to the maximum extent allowed under its mandate, in descending order in the asset types referred to in points (a) to (d) of Article 416(1) until the maximum total investment limit is reached.

4.

Institutions shall develop robust methodologies and processes to calculate and report the market value and haircuts for shares or units in CIUs. Only where the materiality of the exposure does not justify the development of their own methodologies, institutions may rely on the following third parties to calculate and report the haircuts for shares or units in CIUs, in accordance with the methods set out in points (a) and (b) of paragraph 3:

1. (a) the depository institution of the CIU provided that the CIU exclusively invests in securities and deposits all securities at this depository institution;
2. (b) for other CIUs, the CIU management company.

The correctness of the calculations by the depository institution or the CIU management company shall be confirmed by an external auditor.

[Note: This rule corresponds to Article 418 of the CRR as it applied immediately before revocation by the Treasury.]

1.

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2.

Where the justified needs for liquid assets in light of the requirement in Article 412 are exceeding the availability of those liquid assets in a currency, one or more of the following derogations shall apply:

1. (a) by way of derogation from point (f) of Article 417, the denomination of the liquid assets may be inconsistent with the distribution by currency of liquidity outflows after the deduction of inflows;
2. (b) for currencies of third countries, required liquid assets may be substituted by credit lines from the central banks which are contractually irrevocably committed for the next 30 days and are fairly priced, independent of the amount currently drawn, provided that the competent authority of the third country has a publicly disclosed liquidity framework which provides for the same alternative option as this paragraph (b) and provided that the third country has comparable reporting requirements in place;
3. (c) where there is a deficit of level 1 assets, additional level 2A assets may be held by the institution, subject to higher haircuts, and any cap applicable to those assets in accordance with Chapter 2 of the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook may be amended.

3.

The derogations applied in accordance with paragraph 2 shall be inversely proportional to the availability of the relevant assets. The justified needs of institutions shall be assessed taking into account their ability to reduce, by sound liquidity management, the need for those liquid assets and the holdings of those assets by other market participants.

4.

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5.

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[Note: This rule corresponds to Article 419 of the CRR as it applied immediately before revocation by the Treasury.]

2.

Institutions shall regularly assess the likelihood and potential volume of liquidity outflows during the next 30 days as far as products or services are concerned, which are not captured in Articles 422, 423 and 424 and which they offer or sponsor or which potential purchasers would consider to be associated with them, including but not limited to liquidity outflows resulting from any contractual arrangements such as other off-balance sheet and contingent funding obligations, including, but not limited to committed funding facilities, un-drawn loans and advances to wholesale counterparties, mortgages that have been agreed but not yet drawn down, credit cards, overdrafts, planned outflows related to renewal or extension of new retail or wholesale loans, planned derivative payables and trade finance off-balance sheet related products. These outflows shall be assessed under the assumption of a combined idiosyncratic and market-wide stress scenario.

For this assessment, institutions shall take particular account of material reputational damage that could result from not providing liquidity support to such products or services. Institutions shall report at least once a year to the competent authority those products and services for which the likelihood and potential volume of the liquidity outflows referred to in the first subparagraph are material and institutions shall assign appropriate outflows.

[Note: This rule corresponds to Article 420 of the CRR as it applied immediately before revocation by the Treasury.]

1.

Institutions shall separately report the amount of retail deposits covered by the UK deposit guarantee scheme or an equivalent deposit guarantee scheme in a third country, and multiply by at least 5% where the deposit is either of the following:

1. (a) part of an established relationship making withdrawal highly unlikely;
2. (b) held in a transactional account, including accounts to which salaries are regularly credited.

2.

Institutions shall multiply other retail deposits not referred to in paragraph 1 by at least 10%.

4.

Notwithstanding paragraphs 1 and 2, institutions shall multiply retail deposits that they have taken in third countries by a higher percentage than provided for in those paragraphs if such percentage is provided by comparable third country reporting requirements.

5.

Institutions may exclude from the calculation of outflows certain clearly circumscribed categories of retail deposits as long as in each and every instance the institution rigorously applies the following for the whole category of those deposits, unless in individually justified circumstances of hardship for the depositor:

1. (a) within 30 days, the depositor is not allowed to withdraw the deposit; or
2. (b) for early withdrawals within 30 days, the depositor has to pay a penalty that includes the loss of interest between the date of withdrawal and the contractual maturity date plus a material penalty that does not have to exceed the interest due for the time elapsed between the date of deposit and the date of withdrawal.

[Note: This rule corresponds to Article 421 of the CRR as it applied immediately before revocation by the Treasury.]

1.

Institutions shall multiply liabilities resulting from the institution's own operating expenses by 0%.

2.

Institutions shall multiply liabilities resulting from secured lending and capital market-driven transactions as defined in point (3) of Article 192 by:

1. (a) 0% up to the value of the liquid assets in accordance with Article 418 if they are collateralised by assets that would qualify as liquid assets in accordance with Article 416;
2. (b) 100% over the value of the liquid assets in accordance with Article 418, if they are collateralised by assets that would qualify as liquid assets in accordance with Article 416;
3. (c) 100% if they are collateralised by assets that would not qualify as liquid assets in accordance with Article 416, with the exception of transactions covered by points (d) and (e) of this paragraph;
4. (d) 25% if they are collateralised by assets that would not qualify as liquid assets in accordance with Article 416 and the lender is the central government of the United Kingdom, a public sector entity of the United Kingdom or a multilateral development bank. Public sector entities that receive that treatment shall be limited to those that have a risk weight of 20% or lower in accordance with Chapter 2, Title II of Part Three of the CRR;
5. (e) 0% if the lender is a central bank.

3.

Institutions shall multiply liabilities resulting from deposits that have to be maintained:

1. (a) by the depositor in order to obtain clearing, custody or cash management or other comparable services from the institution;
2. (c) by the depositor in the context of an established operational relationship other than that mentioned in point (a);
3. (d) by the depositor to obtain cash clearing and central credit institution services and where the credit institution belongs to a network in accordance with legal or statutory provisions,

by 5% in the case of point (a) to the extent to which they are covered by the UK deposit guarantee scheme or an equivalent deposit guarantee scheme in a third country and by 25% otherwise.

Deposits from credit institutions placed at central credit institutions that are considered as liquid assets in accordance with Article 416(1)(f) shall be multiplied by 100% outflow rate.

4.

Clearing, custody, cash management or other comparable services referred to in points (a) and (d) of paragraph 3 shall only cover those services to the extent that they are rendered in the context of an established relationship on which the depositor has substantial dependence. Those services shall not merely consist of correspondent banking or prime brokerage services, and the institutions shall have evidence that the client is unable to withdraw amounts legally due over a 30-day time horizon without compromising its operational functioning.

5.

Institutions shall multiply liabilities resulting from deposits by clients that are not financial customers to the extent they do not fall under paragraphs 3 and 4 by 40% and shall multiply the amount of these liabilities covered by the UK deposit guarantee scheme or an equivalent deposit guarantee scheme in a third country by 20%.

6.

Institutions shall take outflows and inflows expected over the 30-day horizon from the contracts listed in Annex II of the CRR into account on a net basis across counterparties and shall multiply them by 100% in the case of a net outflow. Net basis shall mean also net of collateral to be received that qualifies as liquid assets under Article 416.

7.

Institutions shall separately report other liabilities that do not fall under paragraphs 1 to 5.

8.

An institution may apply to the competent authority for permission to apply a lower outflow percentage to the liabilities referred to in paragraph 7 on a case-by-case basis with a counterparty who:

1. (a) is any of the following:
1. (i) a UK parent institution or subsidiary institution of the institution or another subsidiary of the same parent institution;
2. (ii) linked to the institution by a common management relationship; or
3. (iii) the central institution or a member of a network compliant with point (d) of Article 400 (2);
2. (b) applies a corresponding symmetric or more conservative inflow by way of derogation from Article 425; and
3. (c) is established in the United Kingdom.

[Note: This is a permission under section 144G of FSMA to which Part 8 of the Capital Requirements Regulations applies]

[Note: This rule corresponds to Article 422 of the CRR as it applied immediately before revocation by the Treasury.]

1.

Collateral other than assets referred to in Article 416(1)(a), (b) and (c), which is posted by the institution for contracts listed in Annex II of the CRR and credit derivatives, shall be subject to an additional outflow of 20%.

2.

An institution shall notify the competent authority of all contracts entered into of which the contractual conditions lead to liquidity outflows or additional collateral needs, within 30 days after a material deterioration of the institution's credit quality. Where those contracts are material in relation to the potential liquidity outflows of the institution, the institution shall add an appropriate additional outflow for those contracts, which shall correspond to the additional collateral needs resulting from a material deterioration in its credit quality, such as a downgrade in its external credit assessment. The institution shall regularly review the extent of any such material deterioration in light of what is relevant under the contracts it has entered into, and shall notify the result of its review to the competent authority.

3.

The institution shall add an additional outflow which shall correspond to the collateral needs that would result from the impact of an adverse market scenario on its derivatives transactions if material.

4.

The institution shall add an additional outflow corresponding to the market value of securities or other assets sold short and to be delivered within the 30-day horizon unless the institution owns the securities to be delivered or has borrowed them at terms requiring their return only after the 30-day horizon and the securities do not form part of the institution’s liquid assets.

5.

The institution shall add an additional outflow corresponding to:

1. (a) the excess collateral the institution holds that can be contractually called at any time by the counterparty;
2. (b) collateral that is due to be returned to a counterparty;
3. (c) collateral that corresponds to assets that would qualify as liquid assets for the purposes of Article 416 that can be substituted for assets corresponding to assets that would not qualify as liquid assets for the purposes of Article 416 without the consent of the institution.

6.

Deposits received as collateral shall not be considered liabilities for the purposes of Article 422 but will be subject to the provisions of this Article where applicable.

[Note: This rule corresponds to Article 423 of the CRR as it applied immediately before revocation by the Treasury.]

1.

Institutions shall report outflows from committed credit facilities and committed liquidity facilities, which shall be determined as a percentage of the maximum amount that can be drawn within the next 30 days. This maximum amount that can be drawn may be assessed net of any liquidity requirement that would be mandated under Article 420(2) for the trade finance off-balance sheet items and net of the value in accordance with Article 418 of collateral to be provided if the institution can reuse the collateral and if the collateral is held in the form of liquid assets in accordance with Article 416. The collateral to be provided shall not be assets issued by the counterparty of the facility or one of its affiliated entities. If the necessary information is available to the institution, the maximum amount that can be drawn for credit and liquidity facilities shall be determined as the maximum amount that could be drawn given the counterparty's own obligations or given the pre-defined contractual drawdown schedule coming due over the next 30 days.

2.

The maximum amount that can be drawn of undrawn committed credit facilities and undrawn committed liquidity facilities within the next 30 days shall be multiplied by 5% if they qualify for the retail exposure class under the Standardised or IRB approaches for credit risk.

3.

The maximum amount that can be drawn of undrawn committed credit facilities and undrawn committed liquidity facilities within the next 30 days shall be multiplied by 10% where they meet the following conditions:

1. (a) they do not qualify for the retail exposure class under the Standardised or IRB approaches for credit risk;
2. (b) they have been provided to clients that are not financial customers;
3. (c) they have not been provided for the purpose of replacing funding of the client in situations where they are unable to obtain their funding requirements in the financial markets.

4.

The committed amount of a liquidity facility that has been provided to an SSPE for the purpose of enabling that SSPE to purchase assets, other than securities, from clients that are not financial customers shall be multiplied by 10%, provided that the committed amount exceeds the amount of assets currently purchased from clients and that the maximum amount that can be drawn is contractually limited to the amount of assets currently purchased.

5.

The institutions shall report the maximum amount that can be drawn of other undrawn committed credit facilities and undrawn committed liquidity facilities within the next 30 days. This applies in particular to the following:

1. (a) liquidity facilities that the institution has granted to SSPEs other than those referred to in point (b) of paragraph 3;
2. (b) arrangements under which the institution is required to buy or swap assets from an SSPE;
3. (c) facilities extended to credit institutions;
4. (d) facilities extended to financial institutions and investment firms.

6.

By way of derogation from paragraph 5, institutions which have been set up and are sponsored by the central or a regional government of the United Kingdom may apply the treatments set out in paragraphs 2 and 3 also to credit and liquidity facilities that are provided to institutions for the sole purpose of directly or indirectly funding promotional loans qualifying for the exposure classes referred to in those paragraphs. By way of derogation from point (g) of Article 425(2), where those promotional loans are extended via another institution as intermediary (pass through loans), a symmetric in and outflow may be applied by institutions. Those promotional loans shall be available only to persons who are not financial customers on a non-competitive, not for profit basis in order to promote public policy objectives of the central or regional government. It shall only be possible to draw on such facilities following the reasonably expected demand for a promotional loan and up to the amount of such demand linked to a subsequent reporting on the use of the funds disbursed.

[Note: This rule corresponds to Article 424 of the CRR as it applied immediately before revocation by the Treasury.]

1.

Institutions shall report their liquidity inflows. Capped liquidity inflows shall be the liquidity inflows limited to 75% of liquidity outflows. Institutions may exempt liquidity inflows from deposits placed with other institutions and qualifying for the treatments set out in Article 113(6) from this limit. Institutions may exempt liquidity inflows from monies due from borrowers and bond investors related to mortgage lending funded by bonds eligible for the treatment set out in Article 129(4), (5) or (6) or by CRR covered bonds from this limit. Institutions may exempt inflows from promotional loans that the institutions have passed through. An institution may apply to the competent authority for permission fully or partially to exempt inflows where the provider is a parent or a subsidiary institution of the institution or another subsidiary of the same parent institution or linked to the institution by a common management relationship.

[Note: This is a permission under section 144G of FSMA to which Part 8 of the Capital Requirements Regulations applies]

2.

The liquidity inflows shall be measured over the next 30 days. They shall comprise only contractual inflows from exposures that are not past due and for which the institution has no reason to expect non-performance within the 30-day time horizon. Liquidity inflows shall be reported in full with the following inflows reported separately:

1. (a) monies due from customers that are not financial customers for the purposes of principal payment shall be reduced by 50% of their value or by the contractual commitments to those customers to extend funding, whichever is higher. This does not apply to monies due from secured lending and capital market-driven transactions as defined in point (3) of Article 192 that are collateralised by liquid assets in accordance with Article 416 as referred to in point (d) of this paragraph.
   By way of derogation from the first subparagraph of this point, institutions that have received a commitment referred to in Article 424(6) in order for them to disburse a promotional loan to a final recipient may take an inflow into account up to the amount of the outflow they apply to the corresponding commitment to extend those promotional loans;
2. (b) monies due from trade financing transactions referred to in point (b) of the second subparagraph of Article 162(3) with a residual maturity of up to 30 days, shall be taken into account in full as inflows;
3. (c) loans with an undefined contractual end date shall be taken into account with a 20% inflow, provided that the contract allows the institution to withdraw and request payment within 30 days;
4. (d) monies due from secured lending and capital market-driven transactions as defined in point (3) of Article 192 if they are collateralised by liquid assets as referred to in Article 416(1), shall not be taken into account up to the value net of haircuts of the liquid assets and shall be taken into account in full for the remaining monies due;
5. (e) monies due that the institution owing those monies treats in accordance with Article 422(3) and (4), shall be multiplied by a corresponding symmetrical inflow;
6. (f) monies due from positions in major index equity instruments provided that there is no double counting with liquid assets;
7. (g) any undrawn credit or liquidity facilities and any other commitments received shall not be taken into account.

3.

Outflows and inflows expected over the 30-day horizon from the contracts listed in Annex II of the CRR shall be reflected on a net basis across counterparties and shall be multiplied by 100% in the event of a net inflow. Net basis shall mean also net of collateral to be received that qualifies as liquid assets under Article 416.

4.

By way of derogation from point (g) of paragraph 2, an institution may apply to the competent authority for permission to apply a higher inflow on a case-by-case basis for credit and liquidity facilities with a counterparty who:

1. (a) is a UK parent institution or subsidiary institution of the institution or another subsidiary of the same parent institution or linked to the institution by a common management relationship;
2. (b) applies a corresponding symmetric or more conservative outflow by way of derogation from Articles 422, 423 and 424; and
3. (c) is established in the United Kingdom.

[Note: This is a permission under section 144G of FSMA to which Part 8 of the Capital Requirements Regulations applies]

7.

Institutions shall not report inflows from any of the liquid assets reported in accordance with Article 416 other than payments due on the assets that are not reflected in the market value of the asset.

8.

Institutions shall not report inflows from any new obligations entered into.

9.

Institutions shall take liquidity inflows which are to be received in third countries where there are transfer restrictions or which are denominated in non-convertible currencies into account only to the extent that they correspond to outflows respectively in the third country or currency in question.

[Note: This rule corresponds to Article 425 of the CRR as it applied immediately before revocation by the Treasury.]

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