Back Custom print Link Text Only Rich Text Print

  • LM-1.1 LM-1.1 General Requirements

    • LM-1.1.1

      Licensees must maintain on a continuing basis an appropriate mix of high quality liquid assets in order to meet their obligations when they fall due and to address any liquidity needs and unexpected cash flow required for funding needs.

      January 2014

    • LM-1.1.2

      To address the requirements of Paragraph LM-1.1.1, a minimum amount of liquid assets must be maintained by the licensee. The minimum level of liquid assets is determined by the minimum stock liquidity ratio (See Section LM-1.2) and maturity mismatch ratios (See Section LM-1.3) that must be complied with by the licensee.

      January 2014

    • LM-1.1.3

      Licensees must ensure that at all times they maintain the minimum stock liquidity ratio and maturity mismatch ratios outlined in Paragraph LM-1.1.2. In the event that the licensee does not comply with these ratios, it must notify the CBB by no later than the following business day of the actual level of the ratios. When providing such notification, the licensee must:

      (a) Provide to the CBB, within one week of the non-compliance, a written action plan setting out how the licensee proposes to restore its ratios to the required minimum level and describe the systems and controls that have been put in place to prevent any future non-compliance of the minimum ratios;
      (b) Report to the CBB, on a weekly basis or on another timely basis as required by the CBB, the average stock liquidity ratio until such time as it reaches 30%; and
      (c) Report to the CBB on a monthly basis or on another timely basis as required by the CBB, the negative cumulative maturity mismatch ratios until such time as the 3-month maturity does not exceed 15% and the 6-month maturity band does not exceed 20%.
      January 2014