Chapter

Appendix III. Principal policy decisions of the Executive Board

Author(s):
International Monetary Fund
Published Date:
November 2005
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External audit firm—mandatory rotation and limits on provision of audit-related services and non-audit-related services

1. The contract to conduct the annual external audit of the financial statements of the Fund required under Article XII, Section 7(a) of the Fund’s Articles of Agreement and Section 20 of the Fund’s By-Laws shall be subject to bids every five years.

2. There shall be a mandatory rotation of the Fund’s external audit firm every 10 years. In cases where the Fund’s external audit firm is awarded a second consecutive five-year contract after the first five-year period, the new contract will require that the audit firm rotate the engagement partner and the audit manager.

3. The Fund’s external audit firm shall not be eligible to bid for, and shall not be awarded, the provision of non-audit-related consulting services to the Fund. The provision of audit-related consulting services to the Fund by the Fund’s external audit firm shall be subject to the prior approval of the Executive Board after consultation with the External Audit Committee (EAC), provided that, under no circumstances, shall the remuneration of the Fund’s external audit firm for such services exceed 33 percent of the value of the five-year contract for conducting the annual audit of the financial statements of the Fund.

4. This decision shall not preclude the Fund’s current external audit firm from submitting bids in accordance with this decision and completing any other existing contracts with the Fund.

Decision No. 13323-(04/78)

Adopted August 5,2004

Eleventh General Review of Quotas—establishment of new period for consent to increases

I. The Executive Board approves the attached draft Resolution for transmission to the Board of Governors proposing the establishment of a new period for consent under the Eleventh Quota Review approved by Board of Governors Resolution No. 53–2, effective January 30,1998. Pursuant to Article III, Section 2(c) of the Fund’s Articles of Agreement, the adoption of the Resolution requires positive responses from Governors having an 85 percent majority of the total voting power.

II.

  1. The Board of Governors is requested to vote without meeting pursuant to Section 13 of the By-Laws upon the proposed Resolution entitled “New Period for Consent—Increases in Quotas of Fund Members under the Eleventh General Review.”
  2. The Secretary is directed to send the proposed Resolution entitled “New Period for Consent—Increases in Quotas of Fund Members under the Eleventh Quota Review” to each member of the Fund by rapid means of communication on or before August 31, 2004.
  3. To be valid, votes must be cast by Governors or Alternate Governors and must be received at the seat of the Fund on or before 6:00 p.m., Washington time, on September 20, 2004. Votes received after that time will not be counted.
  4. The effective date of the Resolution of the Board of Governors shall be the last day for voting.
  5. All votes cast pursuant to this decision shall be held in the custody of the Secretary until counted, and all proceedings with respect thereto shall be confidential until the Executive Board determines the result of the vote.
  6. The Secretary is authorized to take such further action as he shall deem appropriate in order to carry out the purposes of this decision (EBD/04/98, 8/25/04).

Decision No. 13336-(04/82)

Adopted August 30, 2004

Attachment

Proposed Resolution of the Board of Governors: New Period for Consent—Increases of Quotas of Members under the Eleventh General Review

WHEREAS paragraph 4 of the Board of Governors’ Resolution No. 53–2 states that, to become effective, duly executed notices for consent to increases in quota under the Resolution must be received in the Fund before 6:00 p.m., Washington time, January 31, 2000, provided that the Executive Board may extend this period as it may determine;

WHEREAS the last extension of the period established in accordance with paragraph 4 of the Resolution expired at 6:00 p.m., Washington time, July 31, 2004;

WHEREAS the Executive Board has recommended the adoption of a Resolution of the Board of Governors, by vote without meeting pursuant to Section 13 of the By-Laws of the Fund, setting a new period for receipt of consents to increases in quota under Board of Governors Resolution No. 53–2, so as to give members that have been unable to consent to their proposed increases in quotas under such Resolution a further opportunity to do so;

NOW, THEREFORE, the Board of Governors hereby RESOLVES that

Fund members that have not consented to an increase in their quotas as proposed by Board of Governors Resolution No. 53–2 within the period established in accordance with paragraph 4 of that Resolution, shall have until 6:00 p.m., Washington time, September 19, 2005, to submit notices in accordance with paragraph 2 of Resolution No. 53–2, by a duly authorized official of the member, provided that the Executive Board may extend this period as it may determine.

PRGF Trust—Reserve Account—review

Pursuant to Decision No. 10286-(93/23) ESAF, adopted on February 22, 1993, as amended, the Fund has reviewed the adequacy of the balances in the Reserve Account of the PRGF Trust and determines that they are sufficient to meet all obligations that could give rise to payments from the Account to lenders to the Loan Account of the PRGF Trust in the six months from October 1, 2004, to March 31, 2005 (SM/04/309, 8/31/04).

Decision No. 13348-(04/87) PRGF

Adopted September 14, 2004

PRGF-HIPC Trust Instrument—Amendment

The Instrument to Establish a Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations (Annex to Decision No. 11436-(97/10), adopted February 4,1997), shall be amended as follows:

1. Section I, Paragraph 1, subparagraph (ix) shall be revised to read as follows:

  • (ix) ‘PRSP’ means a Poverty Reduction Strategy Paper prepared by the member concerned in a participatory process involving a broad range of stakeholders and setting out a comprehensive three-year poverty reduction strategy; and”

2. Section I, Paragraph 1, subparagraph (x) shall become Section I, Paragraph 1, subparagraph (xiv).

3. The following subparagraphs shall be added to Section I, Paragraph 1:

  • (x) ‘I-PRSP’ means an Interim Poverty Reduction Strategy Paper prepared by the member concerned setting out a preliminary reduction strategy as a precursor to a full PRSP; and
  • (xi) ‘PRSP preparation status report’ means a report prepared by the member concerning updating the preliminary poverty reduction strategy set out in an I-PRSP in anticipation of a full PRSP; and
  • (xii) ‘APR’ means an Annual Progress Report prepared by the member concerned reporting on the implementation of a PRSP and updating it as appropriate; and
  • (xiii) ‘Joint Staff Advisory Note’ means a document prepared by the staff of the Bank and the Fund containing an analysis of the strengths and weaknesses of the poverty reduction strategy of the member concerned and identifying priority action areas for strengthening the poverty reduction strategy during implementation; and”

4. The following sentence shall be added at the end of Section III, Paragraph 2(a):

  • “Moreover, the member shall have in place a satisfactory poverty reduction strategy set out in an I-PRSP, PRSP preparation status report, PRSP, or APR, that has been issued to the Executive Board, normally within the previous 12 months, but in any case within the previous 18 months, and has been the subject of an analysis in a Joint Staff Advisory Note also issued to the Executive Board.”

5. Section III, Paragraph 2(c), third sentence, shall be amended to read as follows:

  • “In addition, the member country concerned shall have prepared a PRSP and implemented satisfactorily the strategy therein described for at least one year by the completion point as evidenced by an APR that has been issued to the Executive Board, normally within the previous 12 months, but in any case within the previous 18 months, and has been the subject of an analysis in a Joint Staff Advisory Note also issued to the Executive Board” (SM/04/374, 11/4/04).

Decision No. 133 73-(04/105) PRGF

Adopted November 9, 2004

PRGF Trust Instrument—Amendment

The Instrument to Establish the Poverty Reduction and Growth Facility Trust (Annex to Decision No. 8759-(87/176) ESAF, adopted December 18,1987, shall be amended as follows:

The following subparagraph (g) shall be added to Section II, Paragraph 1:

“(g) The Trustee shall not approve a new arrangement or complete a review under an arrangement unless it finds that (i) the member concerned has a poverty reduction strategy set out in an I-PRSP, PRSP preparation status report, PRSP, or APR that has been issued to the Executive Board, normally within the previous 12 months, but in any case within the previous 18 months; (ii) the I-PRSP, PRSP preparation status report, PRSP, or APR has been the subject of an analysis in a Joint Staff Advisory Note also issued to the Executive Board, provided, however, that no Joint Staff Advisory Note will be required in connection with a PRSP preparation status report, in which case the analysis of the PRSP preparation status report will be included in the staff report on a new arrangement or a review under an arrangement; and (iii) if there are any weaknesses in the member’s poverty reduction strategy, such as those identified in the Joint Staff Advisory Note, and they are critical to Fund support under a PRGF arrangement, they have been addressed. For purposes of this Instrument, the terms I-PRSP, PRSP preparation status report, PRSP, APR, and Joint Staff Advisory Note shall have the meaning given to each of them in Section I, Paragraph 1 of the PRGF-HIPC Trust Instrument (Annex to Decision No. 11436-(97/10), adopted February 4,1997)” (SM/04/374,11/4/04).

Decision No. 13374-(04/105) PRGF

Adopted November 9, 2004

Income position—review of rate of charge on use of Fund resources for FY2005

1. Effective November 1, 2004, the proportion of the rate of charge to the SDR interest rate under Rule T-l shall be 136 percent.

2. Any net income for financial year 2005 in excess of the net income target for FY2005 of SDR 191 million shall be used, first, to reduce retroactively, to the extent possible, but not below 136 percent, the proportion of the rate of charge to the SDR interest rate under Rule T-l referred to in paragraph I of Decision No. 13236-(04/42), adopted April 30, 2004, for the period May 1, 2004 to October 31, 2004; and, second, to further reduce retroactively the proportion of the rate of charge for the entire FY2005. In all other respects, Decision No. 13236-(04/42), adopted April 30, 2004, shall continue to apply (EBS/04/171,12/6/04).

Decision No. 13398-(04/113)

Adopted December 13, 2004

European Central Bank—observer status—review

A. Pursuant to Decision No. 13165-(04/1), adopted December 29, 2003, the Executive Board has reviewed Decision No. 12925-(03/1), adopted December 27, 2002, entitled “European Central Bank—Observer Status,” and has decided to amend Decision No. 12925 to read as follows:

1. The European Central Bank (ECB) shall be invited to send a representative to meetings of the Executive Board on

  • Euro area policies in the context of the Article IV consultations with member countries under Decision No. 12899-(02/119);
  • Fund surveillance under Article IV over the policies of individual euro area members;
  • Role of the euro in the international monetary system;
  • World Economic Outlook;
  • Global Financial Stability Reports; and
  • World economic and market developments.

2. In addition, the ECB shall be invited to send a representative to meetings of the Executive Board on agenda items recognized by the ECB and the Fund to be of mutual interest for the performance of their respective mandates. It is understood, for purposes of this paragraph and provided that there is no objection from the member concerned, that the ECB shall be invited to send a representative to meetings of the Executive Board on

  • Fund surveillance under Article IV over the United States of America and Japan;
  • Fund surveillance under Article IV over the non–euro area member countries of the European Union; and
  • Fund surveillance over the policies of, and on use of Fund resources by, members that are accession countries to the European Union. Currently, the following members are accession countries to the European Union: Bulgaria, Croatia, Romania, and Turkey. The Executive Board will be informed by management, after consultation with the Presidency of the Council of the European Union, of any changes to that list.

3. At Executive Board meetings, the representative of the ECB will have the status of observer and, as such, will be able to address the Board with the permission of the Chairman on matters within the responsibility of the ECB.

4. The Fund shall communicate to the ECB (i) the agenda for all Board meetings and (ii) the documents for the Executive Board meetings to which the ECB has been invited.

5. The Board notes that the ECB has agreed to preserve the confidentiality of all information and documents communicated by the Fund to the ECB, as specified by the Fund, and that any such information and documents shall be solely for the internal use of the ECB.

B. Decision No. 12925-(03/1), adopted December 27, 2002, as amended by this Decision, shall be reviewed again before January 1, 2006 (EBD/04/139,12/17/04).

Decision No. 13414–(05/01)

Adopted December 23, 2004

Fund emergency assistance for natural disasters—subsidization to PRGF-eligible members

The Instrument to Establish the Post-Conflict Emergency Assistance Subsidy Account for PRGF-Eligible Members shall be amended to read as follows:

Instrument to Establish the Post-Conflict and Natural Disaster Emergency Assistance Subsidy Account for PRGF-Eligible Members To help fulfill its purposes, the International Monetary Fund (the Fund) has adopted this Instrument to establish an account in accordance with Article V, Section 2(b) (the Account), which shall be governed by, and administered in accordance with, the following provisions:

Paragraph 1. Purpose of the Account

The purpose of the Account shall be the administration and disbursement of resources provided to the Account by Contributors for the subsidization of the rate of charge on postconflict and natural disaster emergency assistance purchases made by PRGF-eligible members under Decision No. 12341-(00/117), November 28, 2000 (eligible purchases). A member is PRGF-eligible if it is included in the list of members annexed to Decision No. 8240-(86/56) SAF.

Paragraph 2. Subaccounts

(a) The Account shall have at least three separate subaccounts to hold and administer:

  • resources contributed for the subsidization of the rate of charge on postconflict emergency assistance only;
  • resources contributed for the subsidization of the rate of charge on natural disaster emergency assistance only; and
  • resources contributed for the subsidization of the rate of charge on both postconflict emergency and natural disaster emergency assistance.

(b) Further subaccounts may be established to hold and administer resources for the purposes of the Account contributed for a specific eligible member. Resources contributed to subsidize postconflict emergency assistance prior to January 21, 2005, will be placed into the subaccount referred to under (i) of this paragraph, unless otherwise specified, by the Contributor, and used only for the subsidization of the rate of charge on post-conflict emergency assistance purchases by eligible members.

Paragraph 3. Resources of the Account

The resources held in the Account shall consist of

  • grant contributions made to the Account for the purposes of paragraph 1;
  • loans, deposits, and other types of investments made by Contributors to the Account to generate income to be used for the purposes of paragraph 1; and
  • net earnings from the investment of resources held in the Account.

Paragraph 4. Contributions to the Account

The Fund may accept contributions of resources to the Account on such terms and conditions as may be agreed between the Fund and the respective Contributors, subject to the provisions of this Account. For this purpose, the Managing Director is authorized to accept grants and enter into loan, deposit, or other types of investment agreements with the Contributors to the Account.

Paragraph 5. Unit of account

The SDR shall be the unit of account.

Paragraph 6. Media of payment of contributions and exchange of resources

  • Resources provided to the Account shall be in any freely usable currency or such other media as may be agreed by the Fund and the Contributor.
  • Resources held in the Account may be currencies or currencies exchanged for SDRs in accordance with such arrangements as may be made by the Fund for holding and use of SDRs.
  • The Fund may exchange any of the resources held in the Account provided that any balance of a currency held in the Account may be exchanged only with the consent of the issuer of such currency.
  • Payments made from the Account shall be made in SDRs or such other media as may be determined by the Fund.

Paragraph 7. Use of the resources

  • The resources of the Account (including any net income from the investment of such resources) shall be used to provide grants to PRGF-eligible members that have made postconflict and/or natural disaster emergency assistance purchases under Decision No. 12341-(00/117) (eligible recipients), in order to subsidize to an annual rate of 0.5 percent the rate of charge payable to the Fund on the Fund’s holding of the member’s currency resulting from those purchases. Only charges payable after the establishment of the Account will be eligible for subsidization. An otherwise eligible recipient will not be eligible for grants under this provision while in arrears to the General Resources Account, the Special Disbursement Account, the SDR Department, or to a Trust administered by the Fund as Trustee. Once arrears are cleared, only charges payable after such clearance will be eligible for subsidization. The subsidization of emergency natural disaster assistance will be provided upon request by eligible recipients.
  • The grants will be made available to eligible recipients at the same time as quarterly charges on eligible purchases fall due, subject to the availability of adequate resources in the Account, in an amount sufficient to reduce that quarterly rate of charge to 0.5 percent on an annual basis. If, in any quarter, the resources of the Account are insufficient to subsidize the rate of charge on all eligible purchases to 0.5 percent for that quarter, the subsidy to each eligible recipient shall be prorated to bring the effective rate of charge paid after subsidization to the closest common percentage to 0.5 percent.
  • Earmarked resources contributed to the Account shall be used in accordance with the terms agreed with the Contributor and shall not be taken into consideration in the determination of the grant subsidy under subparagraph (b) above. An eligible recipient beneficiary of earmarked resources shall not receive a lower grant subsidy than provided under subparagraph (b) above.

Paragraph 8. Authority to invest resources in the Account

  • Resources held in the Account and not immediately needed for operations of the Account shall be invested at the discretion of the Managing Director, subject to the provisions of subparagraph (c).
  • The Managing Director is authorized (i) to make all arrangements, including the establishment of accounts in the name of the Fund, with such depositories as he deems necessary to carry out the operations of the Account, and (ii) to take all other measures he deems necessary to implement the provisions of this Instrument.
  • Investments may be made in any of the following: (i) marketable obligations issued by an international financial organization and denominated in SDRs or in the currency of a member of the Fund; (ii) marketable obligations issued by a member or by a national official financial institution of a member and denominated in SDRs or in the currency of that member; and (iii) deposits with a commercial bank, a national official financial institution of a member, or an international financial institution that are denominated in SDRs or in the currency of a member.

Paragraph 9. Administration of the Account

  • Assets held in the Account shall be kept separate from the assets and property of all other accounts of, or administered by, the Fund. The assets and property held in such other accounts shall not be used to discharge or meet any liabilities, obligations, or losses of the Fund incurred in the administration of the Account; nor shall the assets of the Account be used to discharge or meet any liabilities, obligations, or losses incurred by the Fund in the administration of such other accounts.
  • The Fund shall maintain separate financial records and prepare separate financial statements for the Account. The financial statements for the Account shall be expressed in SDRs and prepared in accordance with International Accounting Standards.
  • The external audit firm selected under Section 20 of the Fund’s By-Laws shall audit the operations and transactions conducted through the Account. The audit shall relate to the financial year of the Fund.
  • The Fund shall report on the resources and position of the Account in the Annual Report of the Executive Board to the Board of Governors and shall include in that Annual Report the audit report of the external audit firm on the Account.
  • Subject to the provisions of this Instrument, the Fund, in administering the Account, shall apply, mutatis mutandis, the same rules and procedures as apply to operations of the General Resources Account of the Fund.

Paragraph 10. Fees

  • No charge shall be levied in respect of the services rendered by the Fund in the administration, operation, and termination of this Account.
  • All investment costs, including but not limited to costs associated with the exchange of currencies, purchase of securities, and hiring of external asset managers and custodian banks, shall be borne by, and deducted from, the Account.

Paragraph 11. Termination

  • The Account may be terminated at any time by the Fund.
  • Termination shall be effective on the date that all Contributors have received a notice of termination or on such later date, if any, as may be specified in the notice of termination.
  • Any balance remaining in the Account on the date of its termination and after discharge of all obligations of the Account shall be transferred promptly to each of the Contributors in the proportion that the SDR equivalent of its respective contribution bears on the total contributions; except that
    • in the case of earmarked contributions that have been fully used no such transfer shall be made, and
    • a Contributor may instruct that its share or a specified portion thereof be utilized for such other purposes as may be mutually agreed between the Contributor and the Managing Director.

Paragraph 12. Amendments

The provisions of this Instrument may be amended by a decision of the Fund. Should the Fund amend the terms and conditions of this Instrument in a manner that changes the purpose for which contributions are to be used, each Contributor shall have the right to withdraw its individual unused contribution in the proportion that the SDR equivalent of its respective contribution bears to the total contributions.

Paragraph 13. Settlement of questions

Any questions arising under this Instrument shall be settled by mutual agreement between the Fund and the Contributors (EBS/05/4,1/10/05).

Decision No. 13417-(05/5)

Adopted January 21, 2005

Task force on publication of Fund documents and information in languages other than English—establishment

The Executive Board approves the establishment of a task force on publication of Fund documents and information in languages other than English as set forth in EBD/05/12 (2/11/05).

Decision A–12347-(05/15)

Adopted February 15, 2005

Access policy and limits in credit tranches and under Extended Fund Facility—review

1. The Fund has reviewed the guidelines and the limits for access by members to the Fund’s general resources in the credit tranches and under the Extended Fund Facility set forth in Decision No. 12932-(03/6), adopted January 31, 2003. Subject to paragraph 2 below, access by members to the Fund’s general resources in the credit tranches and under the Extended Fund Facility shall be subject to (a) an annual limit of 100 percent of quota, and (b) a cumulative limit of 300 percent of quota, net of scheduled repurchases. These limits shall not be regarded as targets. Within these limits, the amount of access in individual cases will vary according to the circumstances of the member in accordance with criteria established by the Executive Board.

2. Overall access by members to the Fund’s general resources shall be subject to (a) an annual limit of 100 percent of quota, and (b) a cumulative limit of 300 percent of quota, net of scheduled repurchases. The Fund may approve access in excess of the limits set forth in this decision in exceptional circumstances, provided that, at a minimum, the four substantive criteria set forth in BUFF/02/159 (9/20/02) would need to be met to justify such access for members facing a capital account crisis. The procedures set forth in BUFF/02/159 (9/20/02) and BUFF/03/28 (3/5/03) shall apply to all cases involving access in excess of the limits set forth in this decision, and requests for such access in cases of members not facing a capital account crisis shall be justified in light of the four substantive criteria set forth in BUFF/02/159 (9/20/02).

3. The guidelines for access, the access limits set forth in this decision, and the experience with access in amounts exceeding these limits shall be reviewed no later than April 1, 2007, on the basis of all relevant factors, including the magnitude of members’ balance of payments problems and developments in the Fund’s liquidity (EBS/05/42, Sup. 1, 3/16/05).

Decision 13462-(05/32)

Adopted April 1, 2005

Access limits under Poverty Reduction and Growth Facility—review

1. Pursuant to BUFF/03/28 (3/5/03), the Fund as Trustee of the Poverty Reduction and Growth Facility Trust (PRGF Trust) has reviewed the maximum limit and the exceptional maximum limit on access to the resources of the PRGF Trust established by Decision No. 8759-(87/176), adopted December 18, 1987, as amended, and decides that these limits remain appropriate. The Fund shall review these limits no later than April 1, 2007 (EBS/05/42, Sup. 1, 3/16/05).

Decision 13463-(05/32)

Adopted April 1, 2005

PRGF Trust—Reserve Account—review

Pursuant to Decision No. 10286-(93/23) ESAF, adopted on February 22, 1993, as amended, the Fund has reviewed the adequacy of the balances in the Reserve Account of the PRGF Trust and determines that they are sufficient to meet all obligations that could give rise to payments from the Account to lenders to the Loan Account of the PRGF Trust in the six months from April 1, 2005, to September 30, 2005 (EBS/05/48, 3/23/05).

Decision 13468-(05/32)

Adopted March 31, 2005

Income position, rate of charge, and burden sharing for rate of charge on use of Fund resources for FY2006

1. Pursuant to Rule I–6(4)(a), effective May 1, 2005, the rate of charge shall be 108 basis points over the SDR interest rate under Rule T–1.

2. The net income target for FY2006 shall be SDR 188 million. Any net income for FY2006 in excess of SDR 188 million shall be used to reduce retroactively the margin over the SDR interest rate for FY2006 determined in paragraph 1 of this decision. If net income for FY2006 is below SDR 188 million, the amount of projected net income for FY2007 shall be increased by the equivalent of the shortfall. For the purpose of this provision, net income shall be calculated without taking into account net operational income generated by surcharges on holdings arising from purchases under the Supplemental Reserve Facility (SRF), the level based surcharges on holdings arising from purchases in the credit tranches and under the Extended Fund Facility, or the effect on income of the implementation of International Accounting Standard 19—Employee Benefits (EBS/05/62, 4/11/05).

Decision 13483-(05/37)

Adopted April 22, 2005

Burden sharing—implementation in FY2006

Section I. Principles of burden sharing

1. The financial consequences for the Fund that stem from the existence of overdue financial obligations shall be shared between debtor and creditor member countries.

2. The sharing shall be applied in a simultaneous and symmetrical fashion (EBS/05/62,4/11/05).

Section II. Determination of rate of charge

The rate of charge referred to in Rule I–6(4) shall be adjusted in accordance with the provisions of Section IV of this decision and Section IV of Executive Board Decision No. 12189-(00/45), adopted April 28, 2000 (EBS/05/62, 4/11/05).

Section III. Adjustment for deferred charges

Notwithstanding paragraph 1(a) of Section IV of Executive Board Decision No. 12189-(00/45), adopted April 28, 2000, the rate of charge and the rate of remuneration determined under that Section shall be rounded to two decimal places (EBS/05/62, 4/11/05).

Section IV. Amount for Special Contingent Account T–1

1. An amount of SDR 94 million shall be generated during financial year 2006 in accordance with the provisions of this Section and shall be placed to the Special Contingent Account–1 referred to in Decision No. 9471-(90/98), adopted June 20,1990.

2.

  • In order to generate the amount to be placed to the Special Contingent Account–1 in accordance with paragraph 1 of this Section, notwithstanding Rule I–6(4)(a) and (b) and Rule I–10, the rate of charge referred to in Rule I–6(4) and, subject to the limitation in (b), the rate of remuneration prescribed in Rule I–10 shall be adjusted in accordance with the provisions of this paragraph.
  • Notwithstanding paragraph 1 above, adjustments to the rate of charge and the rate of remuneration under this paragraph shall be rounded to two decimal places. No adjustment in the rate of remuneration under this paragraph shall be carried to the point where the average remuneration coefficient would be reduced below 85 percent for an adjustment period.
  • The adjustments under this paragraph shall be made as of May 1, 2005, August 1, 2005, November 1, 2005, and February 1, 2006; shortly after July 31 for the period May 1 to July 31; shortly after October 31 for the period from August 1 to October 31; shortly after January 31 for the period from November 1 to January 31; shortly after April 30 for the period from February 1 to April 30.

3.

  • Subject to paragraph 3 of Decision No. 8780-(88/12), adopted January 29, 1988, the balances held in the Special Contingent Account–1 shall be distributed in accordance with the provisions of this paragraph to members that have paid additional charges or have received reduced remuneration as a result of the adjustment when there are no outstanding overdue charges and repurchases, or at such earlier time as the Fund may decide.
  • Distributions under (a) shall be made in proportion to the amounts that have been paid or have not been received by each member because of the respective adjustments.
  • If a member that is entitled to a payment under this paragraph has any overdue obligation to the Fund in the General Department at the time of payment, the member’s claim under this paragraph shall be set off against the Fund’s claim in accordance with Decision No. 8271-(86/74), adopted April 30, 1986, or any subsequent decision of the Fund.
  • Subject to paragraph 4 of Decision No. 8780-(88/12), adopted January 29, 1988, if any loss is charged against the Special Contingent Account–1, it shall be recorded in accordance with the principles of proportionality set forth in (b) (EBS/05/62, 4/11/05).

Section V. Review

The operation of this decision shall be reviewed when the adjustment in the rate of remuneration reduces the remuneration coefficient to the limit set forth in paragraph 2(b) of Section IV of this decision and Section IV of Executive Board Decision No. 12189-(00/45), adopted April 28, 2000 (EBS/05/62, 4/11/05).

Decision 13484-(05/37)

Adopted April 22, 2005

Surcharges on purchases under Supplemental Reserve Facility and in credit tranches and under Extended Fund Facility—disposition of net operating income

For FY2006, after meeting the cost of administering the PRGF Trust, any remaining net operational income generated by the surcharges on holdings arising from purchases under the Supplemental Reserve Facility and the level based surcharges on holdings arising from purchases in the credit tranches and under the Extended Fund Facility shall be placed, after the end of that financial year, to the General Reserve (EBS/05/62, 4/11/05).

Decision 13486-(05/37)

Adopted April 22, 2005

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