Wednesday, September 04, 2019 /
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
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
DFIs are required to:
- 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.
- Report on the Financial soundness
indicators/prudential ratios of the DFI calculated on a solo and consolidated
- Present for approval, its Audited accounts along
with that of the SPVs on o consolidated basis.
- Meet a consolidated leverage ratio of at least 10%
- Total Assets (On and Off-Balance Sheet inclusive) at all
DFIs are required to note that:
Approval of new SPVs shall depend on the successful performance of earlier approved ones and the meeting of the consolidated prudential ratios, leverage ratio and business objectives at off times.
A consolidated risk-based examination of all subsidiaries and/or SPVs will be conducted on a periodic basis.
note that failure to comply with these requirements would be viewed as a
violation of the provisions of the DFIs' Guidelines, and would be appropriately