S.L. 370.47 Art. 12Specific liquidity requirements. 

(1) The competent authority shall impose the specific liquidity requirements referred to in paragraph (1)(k) of Schedule I

only where, on the basis of the reviews carried out in accordance with regulations 9 and 10, it concludes that an investment firm that does not meet the conditions for qualifying as a small and non‐interconnected investment firm set out in Article 12(1) of the IFR or that meets the conditions set out in Article 12(1) of the IFR but has not been exempted from liquidity requirement in accordance with Article 43(1) of the IFR is in one of the following situations:

(a) the investment firm is exposed to liquidity risk or elements of liquidity risk that are material and are not covered or not sufficiently covered by the liquidity requirement set out in Part Five of the IFR;

(b) the investment firm does not meet the requirements set out in Articles 24 and 26 of the IFD and other administrative measures are unlikely to sufficiently improve the arrangements, processes, mechanisms and strategies within an appropriate time-frame.

(2) For the purposes of paragraph (a) of regulation 12(1), liquidity risk or elements of liquidity risk shall be considered not to be covered or to be insufficiently covered by the liquidity requirement set out in Part Five of the IFR only where the amounts INVESTMENT FIRMS DIRECTIVE) and types of liquidity considered adequate by the competent authority following the supervisory review of the assessment carried out by investment firms in accordance with Article 24(1) of the IFD are higher than the investment firm’s liquidity requirement set out in Part Five of the IFR.

(3) The competent authority shall determine the level of the specific liquidity required pursuant to paragraph (1)(k) of Schedule I as the difference between the liquidity considered adequate pursuant to sub-regulation (2) and the liquidity requirement set out in Part Five of the IFR.

(4) The competent authority shall require investment firms to meet the specific liquidity requirements referred to in paragraph (1)(k) of Schedule I with liquid assets as set out in Article 43 of the IFR.

(5) The competent authority shall substantiate in writing its decision to impose a specific liquidity requirement as referred to in paragraph (1)(k) of Schedule I by giving a clear account of the full assessment of the elements referred to in sub-regulations (1) to (3).