Regulatory Round-up: March 2020
This month’s briefing covers the latest developments impacting asset managers in the wake of the COVID-19 pandemic. The spread of COVID-19 has significantly and adversely impacted global financial markets.
The Challenges of Liquidity Stress Testing
It seems that ‘liquidity risk’ is the prevalent term on everyone’s lips these days. Following a turbulent 2019, with several high-profile fund suspensions, it is perhaps no surprise that liquidity is a 2020 priority for most regulators.
Liquidity Risk: A 2020 Priority
Firms must have appropriate systems, controls and governance to oversee and manage liquidity risk. With the New Year well and truly underway, regulators across the globe have started publishing their priorities for the year ahead. Unsurprisingly, liquidity risk appears to be high up on most of their agendas
Should illiquid assets be held in open ended funds?
Fund liquidity, like a mirage in the desert, can disappear in an instant if not monitored and managed correctly. Events throughout this year have brought fund liquidity to the forefront – as we approach the end of 2019, it is clear we haven’t seen the last of liquidity risk in the headlines.
Is your active fund really a Closet Tracker?
Closet trackers, also known as closet indexing or index hugging, refers to the practice of fund managers claiming to manage portfolios actively when in reality the fund stays close to a benchmark. The issues around ‘closet trackers’ form part of a broader issue on the effectiveness of investor disclosure and the legitimate expectations of investors in respect of the service provided by some asset managers.