• Requirements imposed on an Authorised Person in Category 2 or 3A

    (3) An Authorised Person in Category 2 or an Authorised Person that is a Domestic Firm in Category 3A must:
    (a) establish and maintain a senior management structure to manage Liquidity Risk;
    (b) identify, assess, mitigate, control and monitor Liquidity Risk; and
    (c) monitor the Authorised Person's overall Liquidity Risk profile on a regular basis.

    • Guidance

      In respect of Rule 9.2.2(2)(b), senior management are expected to:

      a. oversee the development, establishment and maintenance of procedures and practices that translate the goals, objectives and risk tolerances approved by the Governing Body into operating standards that are consistent with the Governing Body's intent and which are understood by the relevant members of an Authorised Person's staff;
      b. adhere to the lines of authority and responsibility that the Governing Body has established for managing Liquidity Risk;
      c. oversee the establishment and maintenance of management information and other systems that identify, assess, control and monitor the Authorised Person's Liquidity Risk; and
      d. oversee the establishment of effective internal controls over the Liquidity Risk management process.

    • PRU 9.2.3 PRU 9.2.3

      (1) An Authorised Person may delegate the day-to-day management of its Liquidity Risk to another entity in the same Group for management on a Group basis only if:
      (a) the Governing Body of the Authorised Person:
      (i) has formally approved the delegation;
      (ii) keeps the delegation under review; and
      (b) the Authorised Person notifies the Regulator in writing of the delegation immediately upon its being made.
      (2) If an Authorised Person delegates the management of its Liquidity Risk in accordance with (1), the requirements in this Chapter continue to apply to the Authorised Person.

      • Guidance

        If Liquidity Risk management is delegated as set out in Rule 9.2.3, responsibility for its effectiveness remains with the Authorised Person's Governing Body.