CENTRAL BANK OF Ni Contal Business District Cadasial Zone AO PM.B 0187, Garki oe rca nsTTUTONSSUrSON BERRIES Abuja Teaansoy ‘em ofa png Weste: wie pov September 3, 2019 (OF /01R/CIR/GEN/20/349 RIN LETTER TO ALL DFI PERATION OF ID. SPECIAL VEHICLES We hove noted the spate of requests from Development Finance Insfiutions (0Fis) for special regulotory approvals to operate special purpose vehicles (SVs) in furtherance of operational objectives. It is important that DFls are ttansparent in thet financial reporting and remoin focused on their core objectives. In this regard, DFls cre henceforth requied 10 provide comprehensive disclosures on all subsidiaries and SPV operations. in the some vein, the same regulotory standards that apply fo the parent DFi will apply to the subsidiaries ondior SPV, Specifically, DFs are required to: 1. Submit returns on oll SPVs including details of ownership, corporate ‘govemonce structure, statements of assets and liabiles, income and expenditures, project(s) status, possible sk exposure and mitigants, along with own regulatory retums. 2. Report on the Finencial soundness indicators / prudential ratios of the DFI calevialed on a solo and consoidated bass. 3. Present for approval, is Audited accoun!s along with that of the SPVs on a consolidated basis, 4, Meet a consolidated leverage ratio of af least 10% [Common Equity: Total ‘Assels (On and Off-Balance Sheet inclusivel] at oll times. Finally, DFis are requied to note that: 1. Approval of new SPVs shall depend on the successful performance of earlier cpproved ones and the meeting of the consolidated prudential ralios, leverage ratio and business objectives at all times.2. A consolidated risk-based examination of all subsidiaries and/or SPVs will be conducted on a periodic basis Please note that failure to comply with these requirements would be viewed as @ violation of the provisions of the DFs' Guidelines. and would be appropriately sanctioned. = ‘TOKUN8O MARTINS (Mrs.) Director, Other Financial Insitutions Supervision Department