Regulatory Alerts2020-10-05
Added · Updated
Q&A on IFR/IFD liquidity requirements for investment firms
De Nederlandsche Bank (DNB) will not grant exemptions from the liquidity requirement to small, non-interconnected investment firms or parent companies, despite Article 43(1) and Article 7(4) of the IFR allowing for such discretion. Investment firms must maintain liquid assets equal to at least one-third of their fixed overheads capital requirement (FOR). Firms seeking temporary permission to reduce liquid assets under Article 44 must submit detailed applications explaining exceptional circumstances and providing a 30-day recovery plan, with daily reporting required upon approval. Exemptions at the individual level under Article 6(3) require specific documentation, including consolidated liquidity calculations, organizational charts, legal opinions, and contractual evidence to demonstrate that free movement of funds is not impeded.