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.
Investment Managers need to ensure they have in place appropriate systems and procedures to ensure they meet the Hong Kong Short Selling Reporting obligations of the funds that they manage.
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.
IOSCO has launched a Thematic Review on the implementation of Liquidity Risk Management Recommendations. The Thematic Review aims to assess the extent to which the Recommendations have been implemented through member regulatory frameworks.
It’s been a busy couple of months for the Swedish Supervisory Authority (Finansinspektionen) – so far in 2021, they have issued fines totaling SEK 20,390,500 (USD 2,462,174) for shareholder disclosure failings. With fines ranging from SEK 11,000 to SEK 5,100,000, as displayed in the graph below, non-compliance with Swedish disclosure requirements can be a costly affair.
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 underway, and the end of crisis in sight, we thought we would look back at how the volatility last year caused by COVID impacted the US market and compliance with SEC liquidity rules.
Earlier this month the Securities and Exchange Commission (SEC) published a request for public comment on potential reform measures to improve the resilience of money market funds. The request follows the report of the President’s Working Group on Financial Markets issued in December 2020.
UCITS IV requires UCITS to make an updated KIID available to investors for each sub-fund/standalone fund within 35 business days of 31 December each year. With the deadline fast approaching (19th February 2021) we thought we would take a brief look at some of the key requirements of the UCITS KIID.
This week, on the 1st February 2021, the Statutory Instrument (SI) amending the initial notification threshold under Article 5(2) of the Short Selling Regulation (SSR) entered into force. The SI amends the reporting of net short positions to the Financial Conduct Authority (FCA), in relation to the issued share capital of a company that has shares admitted to trading on a trading venue, from 0.2% to 0.1%.
