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 2015 assessment; the FCA’s 2019 Policy Statement on funds investing in inherently illiquid assets; and the work by the FSB and the International Organization of Securities Commissions (IOSCO).
Liquidity risk in managed funds has been a prominent and increasing concern of regulators globally, particularly in the past two years, in the wake of some high-profile liquidity events. The New Zealand Financial Market Authority (FMA), following a familiar trend we’ve seen recently from many regulators, has published a liquidity risk management report.
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.
Welcome to the Funds-Axis Regulation Round Up! Our monthly update highlights the latest developments impacting the investment compliance industry. The past month brought developments on a range of topics, including: UCITS & AIFMD, Fund Liquidity, Major Shareholdings, Short Selling and PRIIPs KID.
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.
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.
The past month brought important developments on topics such as fund liquidity, costs and fees charged by fund managers, AIFMD, UCITS and Money Market Funds. Most notably, in the UK, HM Treasury published the responses to the consultation on the Overseas Funds Regime, and the Financial Services Bill…
Despite the continuing focus on the rapidly rising COVID-19 infections rates in the US & Europe, the looming Lockdown 2.0, and the impending, potentially contentious race for the White House, October saw regulators press ahead with the launch of several significant fund regulatory developments.
Although liquidity risk management practices vary in different jurisdictions, in most cases, asset managers are required to monitor the liquidity of the fund on a frequent basis. Whilst many aspects of the regulations are broadly similar, differences can be seen from what is considered “liquid”, and around methodology to liquidity buckets, stress testing and reporting requirements. In Europe for example, neither UCITS nor AIFMD specify a specific methodology for calculating liquidity. This is in contrast to the US SEC Liquidity Risk Management Framework requirements which set out a specific methodology to be followed, although that methodology is not without its shortcomings.
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.
