Prudential Regulation Authority Rulebook

9.1

For the purposes of this Part, and subject to 9.2, a credit union must not count an asset as a liquid asset unless it is cash or can be realised for cash within eight business days.

9.2

A credit union must hold liquid assets equal to at least 10% of its total relevant liabilities.

9.3

A credit union must not count as a liquid asset:

1. (1) an amount loaned to another credit union; or
2. (2) a property purchased, or held by it, as premises from which to conduct its business.

9.4

The amount and composition of liquid assets held by a credit union must be prudent and appropriate to the nature, scale and complexity of its business, having regard to material risks, including the risk of a sudden adverse cash flow.

9.5

A credit union must notify the PRA immediately if its liquid assets are below 10% of its total relevant liabilities for more than two consecutive business days.

9.6

When calculating the ratio of its liquid assets to its total relevant liabilities, a credit union must value a security with a maturity of one to five years on the basis that it could be realised at market value minus a discount of 5%.

9.7

An asset maturing on a day that is not a business day must be treated by a credit union as maturing on the next business day.