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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Prudential — Investment, Insurance Intermediation and Banking Module (PIB) [VER33/02-19]
PIB 4 Credit Risk
PIB 4 Part 3 — CRDOM
PIB 4.14 Securitisation
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

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  Versions
(1 version)
 
Dec 9 2012 onwards

PIB 4.14.44



Whole Section PDF

The definitive version of DFSA handbook text is the PDF version as that is the text of the instrument as made and published by the DFSA.

To view past versions of this module in PDF format, please visit the Archive.

(1) For the purposes of PIB Rule 4.14.42, an Authorised FirmG may treat an ExposureG as an eligible liquidity facility provided the following requirements are met:
(a) the liquidity facility documentation must clearly identify and limit the circumstances under which it may be drawn;
(b) draws must be limited to the amount that is likely to be repaid from the liquidation of the underlying ExposuresG and any seller provided Credit EnhancementsG ;
(c) the facility must not provide credit support by covering for any losses incurred in the underlying pool of ExposuresG prior to drawdown;
(d) the facility must not be structured to provide regular or permanent funding;
(e) the facility must be subject to an asset quality test to preclude it being used to cover Credit RiskG ExposuresG that are in default;
(f) where the facility is used to fund externally rated SecuritiesG the facility can only be used to fund SecuritiesG that are externally rated Investment GradeG at the time of funding;
(g) the facility cannot be drawn after all Credit EnhancementsG from which the liquidity facility would benefit have been exhausted; and
(h) repayment of draws of the facility cannot be subordinated to any interests of any note holder in the programme or be subject to deferral or waiver.
(2) Where the ExposureG meets the requirements as set out in (1), the following CCF will apply:
(a) 50% to the eligible liquidity facility regardless of maturity; and
(b) 100% if an external rating of the liquidity facility is used for the risk weighting.
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]