Related provisions for BIPRU 12.5.47
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In relation to its contingent liabilities, a firm should:(1) calculate the impact on its cash flows of those of its contingent obligations that will be triggered in normal financial conditions; and(2) estimate the impact on its cash flows of those of its contingent obligations that may be triggered under the liquidity stresses required by BIPRU 12.5.6 R.
(1) The wholesale net cash outflow component is a firm's peak cumulative wholesale net cash outflow over the next three months where the peak is established by:(a) calculating the daily wholesale net cash flow by reference to a firm's wholesale assets maturing that day and its wholesale liabilities falling due on that day;(b) for each of the business days in the next three months, calculating the cumulative total of such daily net cash flows as at the business day in question;
Some further areas to consider in developing the liquidity risk scenario might include: (1) any mismatching between expected asset and liability cash flows;(2) the inability to sell assets quickly; (3) the extent to which a firm's assets have been pledged; and (4) the possible need to reduce large asset positions at different levels of market liquidity and the related potential costs and timing constraints.
If a firm has incurred a policy liability which cannot be exactly matched by appropriate assets (for example the Limited Price Index (LPI)), the firm should seek to match assets that at least cover the liabilities. For example, an LPI limited to 5% per annum may be matched by an RPI bond or a fixed interest investment matching cash flows increasing at 5% per annum compound. Orders made by the Department for Work and Pensions under section 148 of the Social Security Administration
An obligation to pay a monetary amount (whether or not falling in INSPRU 3.2.16 R) is covered if:(1) the firm holds admissible assets or permitted links1 that are sufficient in value so that the firm reasonably believes that following reasonably foreseeable adverse variations (relying solely on cashflows from, or from realising, those assets) it could pay the monetary amount in the right currency when it falls due; or(2) the obligation to pay the monetary amount is offset by a
Adjustments to accounting values(1) For the purposes of GENPRU and BIPRU, the adjustments in (2) and (3) apply to values calculated pursuant to GENPRU 1.3.4 R in addition to those required by GENPRU 1.3.9 R to GENPRU 1.3.10 R.(2) A BIPRU firm must not recognise either:(a) the fair value reserves related to gains or losses on cash flow hedges of financial instruments measured at amortised cost; or(b) any unrealised gains or losses on debt instruments held, or formerly held,8 in
Some further areas to consider in developing the liquidity risk scenario might include:(1) any mismatching between expected asset and liability cash flows;(2) the inability to sell assets quickly;(3) the extent to which a firm's assets have been pledged; and(4) the possible need to reduce large asset positions at different levels of market liquidity and the related potential costs and timing constraints.
The management report required by DTR 4.1.8 R must also give an indication of:(1) any important events that have occurred since the end of the financial year;(2) the issuer's likely future development;(3) activities in the field of research and development;(4) the information concerning acquisitions of own shares prescribed by Article 22 (2) of Directive 77/91/EEC;(5) the existence of branches of the issuer; and(6) in relation to the issuer's use of financial instruments and where
A firm must develop methodologies for the identification, measurement, management and monitoring of funding positions. Those methodologies must include the current and projected material cash-flows in and arising from assets, liabilities, off-balance-sheet items, including contingent liabilities and the possible impact of reputational risk.22[Note: article 86(4) of the CRD]4
Where the target in a reverse takeover is not subject to a public disclosure regime, or if the target has securities admitted on an investment exchange or trading platform that is not a regulated market but the issuer is not able to give the confirmation and make the announcement contemplated by LR 5.6.12 G, the FCA will generally be satisfied that there is sufficient publicly available information in the market about the proposed transaction such that a suspension is not required