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.
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.
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 regulatory round-up pulls together some interesting regulatory developments we have tracked throughout June. The past month brought a number of important developments, particularly on the EU Money Market Fund Regulation, with ESMA publishing updated reporting instructions, and translations to the MMF guidelines.