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Article (12) Liquidity Requirements

C 3/2023 Effective from 29/9/2023
12.1The following items may be considered as liquid assets:
a.Cash held in a U.A.E. Bank;
b.Certificates of deposit issued by the Central Bank held via a U.A.E. Bank;
c.Short-term deposits with a U.A.E. Bank with maturity up to 30 days; and
d.UAE Federal and local government bonds, which must not exceed 30% of the total amount of liquid assets.
 Encumbered cash held as collateral by a Finance Company is not considered as liquid assets.
12.2To withstand short-term liquidity stress, Finance Companies are required to hold an amount equivalent to 10% of their Aggregate Liabilities in liquid assets. A Finance Company may, for the purpose of this calculation, deduct from Aggregate Liabilities any of the following items:
a.Cash collaterals;
b.Bank guarantees from U.A.E. Banks; and
c.Sovereign guarantees.
 The items listed under the letters a, b and c of this Article must be legally enforceable.
12.3Consistent with Article 12.2 of this Regulation a Finance Company must not hold more than 25% of its liquid assets in a single U.A.E. Bank.
12.4Customer deposits of a Finance Company are not subject to cash reserve requirements.