What changed
Previously, stand-alone Primary Dealers could borrow from the call/notice money market up to 200% of their Net Owned Funds on average in a reporting fortnight. This circular raises that ceiling to 225% of NOF, effective from the date of the circular.
What it means for you
Stand-alone PDs now have greater flexibility to access short-term funds, which can help them manage liquidity more efficiently. The 25 percentage point increase provides additional headroom for leveraging their capital base in the money market.
What you must do
- Update internal treasury and risk management systems to reflect the new 225% of NOF borrowing limit.
- Review current call/notice money borrowing levels to ensure compliance with the revised ceiling.
- Communicate the change to relevant treasury and compliance teams for immediate implementation.
Who it affects
Stand-alone Primary Dealers, Treasury departments of PDs, Compliance teams at PDs
What is the new borrowing limit for stand-alone Primary Dealers in the call/notice money market?
The limit has been increased from 200% to 225% of their Net Owned Funds as at end-March of the preceding financial year, calculated on an average basis over a reporting fortnight.
When does this revised limit take effect?
The revised limit is effective from the date of the circular, i.e., September 2, 2009.