Regulatory Alerts2022-01-01
Guidelines for the Retail Repo Mismatch Ratio Prudential Benchmark
The Financial Services Commission of Jamaica issued these guidelines to establish a prudential benchmark for the Retail Repo Mismatch Ratio, aiming to mitigate duration and liquidity risks in securities dealers' retail repurchase agreement business. The document defines the calculation methodology for the ratio and mandates a phased implementation schedule, requiring dealers to progressively reduce their RRMR from a monitoring range down to a final benchmark of 15% by December 31, 2020. Securities dealers exceeding specific thresholds during the transition period face enhanced supervisory measures, including mandatory action plans and potential enforcement actions, while an early warning indicator of 13.5% is introduced to ensure ongoing compliance.