Throughout August you will have seen a number of regulators publishing updated circulars, opinions and notices in relation to the application of the ESMA Guidelines on stress test scenarios under the Money Market Fund Regulation (EU) 2017/1131 (MMFR).
Background In 2019, the Bank of England (BoE) and Financial Conduct Authority (FCA) launched a joint review into vulnerabilities associated with the liquidity mismatch. The review built on the FPC’s…
17 Liquidity Risk Management Recommendations from The New Zealand Financial Market Authority (FMA) Liquidity risk in managed funds has been a prominent and increasing concern of regulators globally, particularly in…
In early 2020, the European Securities and Markets Authority (ESMA) launched a Common Supervisory Action (CSA) on UCITS liquidity risk management (LRM). The purpose of this exercise was to simultaneously conduct coordinated supervisory activities in 2020 and to assess whether UCITS managers comply with their liquidity management obligations.
The European Securities and Markets Authority (ESMA) has launched a consultation on potential reforms of the EU Money Market Funds Regulation (MMFR). This follows the SEC’s request for comment seen last month, which similar to the ESMA consultation, reviews the stress experienced by MMFs during the March 2020 crisis and assesses and proposes potential reforms.
ESMA has published the results of the 2020 Common Supervisory Action (CSA) on UCITS liquidity risk management (LRM). UCITS are characterised by the offer to investors of on-demand liquidity. Article 84(1) states that UCITS shall repurchase or redeem its units at the request of any unit-holder. If the assets held within the fund cannot be sold quickly to meet redemption requests, there could be severe issues in paying redeeming investors. This can be exacerbated in times of stress when investors may look to redeem en masse whilst the market for the assets is drying up.
A reminder of the 17 Recommendations IOSCO has launched a Thematic Review on the implementation of Liquidity Risk Management Recommendations. The Thematic Review aims to assess the extent to which…
This week we return to our refresher series on liquidity risk rules around the world, and in particular, the rules in the United States. With the COVID-19 vaccine rollout well…
Throughout the year regulators have focused on liquidity, and as this year draws to a close, that focus shows no signs of diminishing. “Asset managers need to step up their…
On 22nd October 2020, the European Commission (EC) published the much anticipated consultation on the Alternative Investment Fund Managers Directive (AIFMD). Background Under AIFMD Article 69, the EC is required…