PRA makes Shari'ah-compliant liquid assets instrument: PRA has fed back on the responses to its consultation on expanding the set of assets eligible for Shari'ah firms' liquidity buffer. The changes proposed sought to address concentration risk, as Shari'ah firms had so far only been able to invest their liquidity assets buffer in sukuk issued by the Islamic Development Bank. Some respondents to the consultation said the changes do not go far enough, despite extending eligibility to sukuk issued by the highest-rated sovereigns and to those issued by sovereigns with lower credit rating and by non-financial corporates, subject to haircuts which account for a less developed secondary market. Nonetheless, PRA has decided to go ahead with the changes as proposed, also clarifying that a sukuk issued by a government-owned or guaranteed financial institution is not eligible for the liquidity buffer. It made the Prudential Sourcebook For Banks, Building Societies And Investment Firms (Liquidity Standards) Amendment Instrument 2014 on 23 May. The instrument came into force on 26 May. PRA has also made other unrelated instruments, on conglomerates' capital adequacy, capital for lending in foreign currencies and risk management of asset encumbrance. (Source: Policy Statement PS4/14)