1. Fad Diets and NSFR

2. What is NSFR?
Net Stable Funding Ratio is a Basel III Capital Requirement set by the G-20
The Federal Reserve and the FDIC implemented NSFR in US law.
NSFR applies to bank holding companies with over $250 billion in assets or
over $10 billion in on-balance-sheet foreign exposure.
It applies in a modified form for bank holding companies with $50-$250 billion in assets.
NSFR reports must be provided quarterly to the public through a website or quarterly financial statements.
If reports aren’t provided, institutions can be fined or regulators can insist on capital charge changes.
What is 8of9?
8of9 is a next generation RegTech company that translates complex financial regulation into simple solutions.
We strive to build a world where regulatory compliance is automated and easy to understand. 
Our tools capture, store, and monitor regulatory content so you can focus on doing what you do best.
We built our business model with normal humans in mind.

3. Watching Your NSFR Weight
Think of NSFR as another fad diet from the regulators with the same data you are already using for other stress tests.
Equity and liabilities multiplied by specific stability factors
Available Stable Funding Weight
Required Stable Funding Weight
100
100 *
Equity and assets multiplied by specific risk and liquidity factors
* Note: Institutions subject to the modified ratio must maintain ASF levels above 70%.

4. NSFR Nutritional Facts
NSFR requires you to count your “capital calories” which change depending on the products you trade in.
Liability Type
ASF Weight
Asset Type
RSF Weight
Capital
100%
Cash 0%
Long Term Borrowing (12m+)
OBS 5%
Client Deposits
Current
Savings
Time
90%
95%
Securities
Level 1
Level 2
50%
Other Deposits / Short Term Borrowing
1m – 6m
6m - 12m
Loans
...to Banks
...to Other Borrowers
85%
Trading / Pension Liabilities
Derivatives
Bank Deposits
Other Assets

5. How This New Diet May Impact Your Business
Capital on Hand                   (Most stable source of funding)
Derivatives                           (Requires 100% stable funding)
Short-term Loans                 (Requires less stable funding than long term) 
Long-term Loans (Requires more stable funding than short term)

6. How Do You Shape Up Against Others Watching Their Weight?
This new diet may seem tough, but not impossible! In fact, according to 2012 IMF data, most of the world is already complying with the NSFR.
Source:

7. Why facing NSFR is so challenging
There are five major obstacles in implementing NSFR.
1. The underlying data is unreliable or is not in the format required to make a regulatory determination.
2. Regulation overlaps with itself and other regulations and puts pressure on SMEs.
3. The regulations are complex and constantly changing.
4. Internal processes within financial institutions are also constantly changing.
5. Insufficient Governance and Granularity
Bad Data!
Regulatory Rat Nests!
Changing Regulations!
Lot of Complexity!
No Audit trail!
Compliance required by January 1, 2018!

8. Don’t Worry, You’re Already Collecting The Data You Need!
Chances are, your organization is not coordinating, but the underlying data is the same.
NSFR
DFAST
EMIR
Requires accounting of derivatives values (MTM or other)
Requires accounting of collateral value
Requires quarterly accounting of on and off balance sheet items
Requires accounting of held securities
Requires accounting of customer deposits and loans

9. How can help you with NSFR.
Data Internal to the customer
Data External to the customer
Data that needs to be Created
Regulatory Answer!
8of9 believes that all regulation should be broken down into ones and zeros. All data falls into one of the following categories.
8of9’s real time RegOil™ Engine
Other Service Providers
3rd Party Data Cleanse
Fully auditable, controlled, accurate, up-to-date answer, transaction by transaction
Output of data cleanse prepared in appropriate rules engine formatting
Non Regulatory Data (e.g. Pricing Data)
Up to date regulatory status and rules
8of9’s Business Logic Engine

10. Steps To Tracking NSFR Compliance
Receive Client Data
Examine Data Format & Categories
Model Logic Engine Based On Rule
Teach Program To Understand The Various Categories In Terms Of The Rule
Assign Regulatory Weights To Each Category
Program Engine To Add Up Various Categories And Apply Weight Factor
Have Program Take The Converted Values And Run Ratio Calculation
Report NSFR Level
8of9 will monitor the regulations for changes and keep the model up-to-date!
Data points from NSFR are interchangeable with other regulatory requirements.
We can test hypothetical situations to see if a change in business will alter compliance status.

11. We look forward to working with you soon!
Help us help you.
We look forward to working with you soon!
Chief Nerds
CEO Mary Kopczynski, J.D./Ph.D.
COO Matthew Fand, J.D./M.B.A.
Address
8of9
1115 Broadway 11th Floor
New York, NY 10010
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