IBANK 8.4.7 HQLA portfolio — general operational requirements

(1) An Islamic banking business firm's HQLA portfolio must be under the control of the specific function or functions charged with managing the firm's liquidity. That function must always have the authority, and must always be legally and operationally able, to monetise any asset in the portfolio.

For the firm to be operationally able to monetise assets, the firm must have the necessary procedures and appropriate systems, and must have access to all the necessary information. The function must actually be able to monetise any of the assets within the standard settlement period for the asset class.
(2) That control must be shown by:
(a) maintaining the portfolio in a separate pool managed by the function solely as a source of contingent funds; or
(b) showing that the function can monetise any asset in the portfolio at any time, and that the proceeds of doing so are available to the function throughout the following 30-calendar-day period, consistently with the firm's business and risk-management strategies.
(3) The firm must monetise a representative part of the portfolio periodically (at least annually):
(a) to test the firm's access to the market, the effectiveness of its processes for liquidation and the availability of the assets; and
(b) to minimise the risk of giving a negative signal during a period of actual liquidity stress.
Inserted by QFCRA RM/2018-2 (as from 1st May 2018).