Join Mailing List

For latest news and information about Treasury and Financial Markets, enter your details below:

Transitional Provisions

Print Preview Send to a Friend Share

Published: 20th January 2011 by William Webster

Just in case you missed it consultation paper 11/1 now extends the time simplified ILAS BIPRU firms have to reach their buffer requirement. The relevant points are below.

The following is directly from the FSA's CP11/1. It explains the changes.

Background and context

3.9 We set simplified ILAS firms an industry-wide glide path providing a phased transition to firms holding 100% of their simplified buffer requirement. The effect is that simplified ILAS BIPRU firms have a transitional period of three years until 1 October 2013 to reach 100% of their simplified buffer requirement.

3.10 The Basel Committee is producing minimum liquidity requirements for internationally active banks that will be implemented in the UK through changes to EU law, with a proposed implementation date of 1 January 2015. We released a statement on tightening quantitative standards that postponed any decision on calibration and a transition path for standard ILAS BIPRU firms until we have more details of these changes.

3.11 However, at present we require simplified ILAS BIPRU firms to transition to full quantitative standards by 1 October 2013. We therefore propose to harmonise the implementation time frames for simplified and standard ILAS firms for the build up of their liquid assets buffer so that both classes of firms will hold 100% of their buffer requirements by 1 January 2015.

Proposed amendments

3.12 We propose amendments to the liquid assets buffer scalar for simplified ILAS BIPRU firms so that they are required to hold: 30% of their simplified buffer requirement until 28 February 2012; 50% until 30 June 2013; 70% until 31 December 2014; and 100% thereafter, when the proposed transitional provisions would cease to apply. In practice, this means that the duration of the transitional provisions would be extended by 15 months from 30 September 2013 until 31 December 2014.

Comment

Simplified firms won't complain about the extension. It's a pity it wasn't thought through earlier.

Displaying 1 to 1 of 1 results in total.

Related Documents

Free to ViewRegulation > CP 09/14 Strengthening liquidity standards 3: Liquidity transitional measures June 2009 100% relevant

29th June 2009

The FSA presumes that every firm must be self sufficient for liquidity purposes unless a waiver is granted. The systems and controls requirement applies to all firms from Q4 2009 and will have no phased or transitional introduction. This is a summary of the CP.