Basel Framework: LCR40.44 reference to LCR40.87

LCR40.44 sends segregated prime-brokerage balances to LCR40.87 (wholesale loan payments, 50% or 100%), while the rule for such balances sits in LCR40.88, which is optional and conditional on HQLA.

Consequence

Position: Prime broker holds 100 of segregated client-protection cash maturing within 30 days, kept in HQLA Reading a: Follow LCR40.44 literally: inflow in 40.87 category (financial institution 100% or 50%) mandatory Reading b: Follow LCR40.88: optional 100% inflow only if balances kept in HQLA Difference: up to 100 of inflow

Proposed correction

Clarify or correct the cited passage so that the rule and its references give one result for the stated case.

Issued by

Basel Committee on Banking Supervision

Act

Basel Framework LCR40 (in force 2019-12-15, published 2023-03-30)

Place

LCR40.44 reference to LCR40.87

Record

Discrepancy

Class

Text of the act

Where it arose

The text of the act

Arxo's conclusion

Confirmed

Official text

Unchanged at last check

Last checked

2026-10-31

Evidence

Contradiction within the text. Quotations are verbatim from the official material; translations are ours and marked.

These offsetting balances held in segregated accounts are treated as inflows in LCR40.87 and must be excluded from the stock of HQLA.

Banks may also recognise in this category inflows from the release of balances held in segregated accounts in accordance with regulatory requirements for the protection of customer trading assets, provided that these segregated balances are maintained in HQLA.

How to check it without Arxo's tools

1. Open Basel Framework LCR40 (in force 2019-12-15, published 2023-03-30) and find LCR40.44 reference to LCR40.87. Compare the text with the quotation above. A copy is kept in this register: 44c6353c1aad8b74-LCR40@2019-12-15~2023-03-30.txt (SHA-256 44c6353c1aad8b74e46059cb902093f993fbc36eb0190b1d17015639add29d56, copy of the official file).
2. The finding holds if the quoted passages read as shown and the comparison gives the result stated at the top of this page. If it does not, write to us with the record ID.

How this finding was made

AI models read the texts, built the examples and reviewed the findings.

Responsible institutions

• Basel Committee on Banking Supervision — maintains the Basel Framework

Reported to

Responses

No response recorded.

History

1. 2026-10-31Confirmed by Arxo
2. 2026-10-31Entered in the register
3. 2026-10-31Reported to Basel Committee on Banking Supervision (e-mail)

Cite this record

Arxo Law, Arxo Findings Register, ARXO-2026-0380, https://arxo.io/findings/ARXO-2026-0380/ (status as of 2026-10-31). Data: ARXO-2026-0380.json.