CBN Releases Requirements For The Establishment And Operation Of DFIs' Subsidiaries And SPV

Wednesday, September 04, 2019 / 01:20PM /CBN 

We have noted the spate of requests from Development Finance Institutions (DFIs) for special Regulatory approvals to operate special purpose vehicles (SPVs) in furtherance of operational objectives. It is important that DFIs are transparent in their financial reporting and remain focused on their core objectives.
In this regard, DFIs are henceforth required to provide comprehensive disclosures on all subsidiaries and SPV operations. In the same vein, the same regulatory standards that apply to the parent DFI will apply to the subsidiaries and/or SPV.
Specifically, DFIs are required to:

1. Submit returns on off SPVs including details of ownership, corporate governance structure. Statements of assets and liabilities, income and expenditures, project(s) status, possible risk exposure and mitigants, along with own regulatory returns.
2. Report on the Financial soundness indicators/prudential ratios of the DFI calculated on a solo and consolidated basis.
3. Present for approval, its Audited accounts along with that of the SPVs on o consolidated basis.
4. Meet a consolidated leverage ratio of at least 10% [Common Equity: 
5. Total Assets (On and Off-Balance Sheet inclusive) at all times.