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.
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
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
When calculating initial capital, a firm may include its audited retained earnings only after making the following adjustments: (1) a firm must not recognise the fair value reserves related to gains or losses on cash flow hedges of financial instruments measured at amortised cost;(2) in respect of a defined benefit occupational pension scheme, a firm must derecognise any defined benefit asset;
(3) a firm must not include any unrealised gains from investment
When calculating initial capital, a firm may include its partners' capital only after making the following adjustments: (1) a firm must not recognise the fair value reserves related to gains or losses on cash flow hedges of financial instruments measured at amortised cost;(2) in respect of a defined benefit occupational pension scheme, a firm must derecognise any defined benefit asset;
(3) where applicable, a firm must deduct any asset in respect of deferred
When calculating initial capital, a firm may include its audited retained earnings only after making the following adjustments: (1) a firm must not recognise the fair value reserves related to gains or losses on cash flow hedges of financial instruments measured at amortised cost; (2) in respect of a defined benefit occupational pension scheme, a firm must derecognise any defined benefit asset;
(3) a firm must not include any unrealised gains from investment
When calculating initial capital, a firm may includes its partners' capital only after making the following adjustments: (1) a firm must not recognise the fair value reserves related to gains or losses on cash flow hedges of financial instruments measured at amortised cost; (2) in respect of a defined benefit occupational pension scheme, a firm must derecognise any defined benefit asset;
(3) where applicable, a firm must deduct any asset in respect of deferred
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
When calculating a firm’s capital resources, the following adjustments apply to retained profits or (for sole traders or partnerships) current accounts figures:(1) a firm must deduct any unrealised gains or, where applicable, add back in any unrealised losses on cash flow hedges of financial instruments measured at cost or amortised cost;(2) a firm must de-recognise any defined benefit asset; (3) a firm may substitute for a defined benefit liability its deficit reduction amount
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 unless those events are:4(a) 4reflected in the issuer’s profit and loss account or balance sheet; or(b) 4disclosed in the notes to the issuer’s audited financial statements;(2) the issuer's likely future development;(3) activities in the field of research and development;(4) the information concerning acquisitions of own
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