In these Regulations, unless the context otherwise requires-
"Act"
means the Financial Institutions Act, 2004, Act 2 of 2004;
"available stable funding"
means the portion of capital and liabilities of a financial institution expected to be reliable over the time horizon considered by the net stable funding ratio which extends to one year;
"cash"
means notes and coins which are legal tender in Uganda, electronic money, and any other currency freely negotiable and transferable in international exchange market;
"Central Bank"
means the Bank of Uganda existing under the Bank of Uganda Act;
"electronic money"
means a monetary value represented by a claim on the issuer, which is- (a) stored on an electronic device; (b) issued upon receipt of funds in an amount not less in value than the monetary value received; and (c) accepted as a means of payment by undertakings other than the issuer and prepaid or redeemable in cash; "electronic money issuer" means a payment service provider who is licensed to issue electronic money under section 47 of the National Payment Systems Act, 2020; "expected cash inflows" means the cash calculated by multiplying the outstanding balances of various categories of contractual receivables by the rates at which the cash inflows are expected to flow in; "expected cash outflows" means the cash calculated by multiplying the outstanding balances of various categories
or types of liabilities and off-balance sheet items by the rates at which the cash outflows are expected to run off or be drawn down; "financial institution" means a company licensed to carry on or conduct financial institutions business in Uganda and includes a commercial bank, merchant bank, mortgage bank, post office savings bank, credit institution, a building society, an acceptance house, a discount house, a finance house or any institution which by regulations is classified as a financial institution by the Central Bank; "high-quality liquid assets" means assets that are liquid in markets during a time of stress or assets that are easily and immediately converted into cash at very little or no loss of value; "internal liquidity adequacy assessment process" means the periodic identification, measurement, management and monitoring of liquidity risk, implemented by a financial institution; "liquidity" means ability of a financial institution to obtain sufficient cash or cash equivalent at the right time to meet liabilities of a financial institution as the liabilities fall due; "liquidity coverage ratio" means the ratio of stock of high- quality liquid assets of a financial institution to net cash outflows of the financial institution over a period of thirty days and shall be equal or higher than one hundred percent or as prescribed by the Central Bank; "liquidity risk" means the risk of a financial institution being unable to meet commitments, repayments and withdrawals as they fall due in terms of time, place and in the required currency and that the financial institution may not be able to fund increases in assets or meet obligations as they fall due without incurring unacceptable losses;
"liquidity risk appetite"
means the total impact of liquidity risk a financial institution is willing to accept in pursuit of the strategic objectives of the financial institution; "net cash outflows" means the expected cash outflows minus expected cash inflows for the subsequent thirty calendar days; "net stable funding ratio" means the ratio of available stable funding to the required stable funding of a financial institution and shall not be less than one hundred percent; "non-convertible currency" means a currency that is used primarily for domestic transactions and is not openly traded on a foreign exchange market; "off-balance sheet items" includes all items not shown on the balance sheet but which constitute credit risk and such other risks as in guarantees, acceptances, performance bonds, letters of credit and other off-balance sheet items deemed to constitute risk by the Central Bank; "required stable funding" means a function of the liquidity characteristics and residual maturities of the various assets held by a financial institution as well as those of its off- balance sheet items; "secured funding sources" means funding sources that are backed by security or collateral whereby the funding obtained is less than or equal to the market value of the assets constituting that security or on the basis of a valuation by the Central Bank; "stress" means a sudden or severe deterioration in the solvency or liquidity position of a financial institution due to changes in market conditions or financial institution specific factors which may affect the ability to meet commitments of the financial institution as the commitments fall due;
"unencumbered high-quality liquid asset"
means an asset free of legal, regulatory, contractual or other restrictions on the ability of the financial institution to liquidate, sell, transfer, or generally dispose of the asset via outright sale or a repurchase agreement; "unsecured funding sources" means funding sources- (a) that do not require security; (b) in respect of any funding backed by security or any part of the funding which at any time exceeds the market value of the assets constituting that security; or (c) in respect of any funding backed by security or any part of the funding where the Central bank is satisfied that there is no established market value, on the basis of a valuation approved by the Central Bank.
