IBANK 8.4.16 Liquidity coverage ratios required

(1) Subject to rule 8.4.18, a liquidity risk group A Islamic banking business firm must maintain its LCR:
(a) in the calendar year 2018 — at 90% or higher; and
(b) in each subsequent calendar year — at 100% or higher.
Note Rule 8.4.18 allows an Islamic banking business firm to monetise part of its HQLA portfolio during a period of liquidity stress.

Rule 8.4.16 sets minimum levels and is not intended to limit the generality of the requirements in rule 8.4.6.
(2) The requirement for the firm to maintain the LCR required by subrule (1) is called the firm's LCR requirement.

An authorised firm must be continually aware of its LCR because of the requirements for the firm to maintain its LCR, and to report to the Regulatory Authority if the LCR falls below the firm's LCR requirement. How often the firm needs to calculate its LCR depends on the nature of the firm's business. Some relevant factors would be:
•    how volatile the values of the firm's assets and exposures are
•    how actively the firm trades.
For the requirement to report if the firm's LCR falls below its LCR requirement, see rule 8.4.19.
Inserted by QFCRA RM/2018-2 (as from 1st May 2018).