S.L. 370.15 Art. 18Specific liquidity requirements.

(1) For the purposes of determining the appropriate level of liquidity requirements on the basis of the review and evaluation carried out in accordance with these regulations, the competent authority shall assess whether any imposition of a specific liquidity requirement is necessary to capture liquidity risks to which an investment firm is or might be exposed, taking into account the following:

(a) the particular business model of the investment firm;

(b) the investment firm’s arrangements, processes and mechanisms in relation to liquidity risk as referred to in the Investment services Rules and these regulations;

(c) the outcome of the review and evaluation carried out in accordance with regulation 11;

(d) (Deleted by L.N. 30 of 2022).

(2) In particular, without prejudice to the provisions of the Act, the regulations and the Investment Services Rules transposing the requirements of Article 67 of the CRD, the competent authority will consider the need to apply administrative penalties or other administrative measures, including prudential charges, proportionate to the disparity between the actual liquidity position of an investment firm and any liquidity and stable funding requirements established by the competent authority or at European Union level.

(3) The competent authority shall monitor developments in relation to liquidity risk profiles, for example, product design and volumes, risk management, funding policies and funding concentrations.

(4) The competent authority shall take effective action where developments referred to in sub-regulation (2) may lead to systemic instability or instability of the investment firm itself.

(5) The competent authority shall inform the EBA about any actions carried out pursuant to sub-regulation (3).