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.
The Canadian Securities Administrators (CSA) has published guidance to help investment fund managers (IFMs) develop and maintain effective liquidity risk management (LRM) frameworks for investment funds.
On 2nd September 2019, the European Securities and Markets Authority (ESMA) published its final guidance regarding liquidity stress tests of investment fund…
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.