|
|
The report also finds that existing rules governing stress testing, notably the UCITS Directive and AIFMD, are already at an advanced level, and provide robust and appropriate liquidity risk management processes.
Based on the analysis, and in view of ESMA’s ongoing work on Guidance for national regulators in respect to LST for investment funds, EFAMA and AMIC have pinpointed three key findings:
As availability of, and access to, data concerning the underlying investors remains a key challenge, regulators should assist asset managers in obtaining information from distributors that is relevant from a redemption risk management perspective.
Liquidity Stress Testing is an important risk management tool in investment funds. It has long been standard practice in the industry, and its proper supervision is key to protecting investors and ensuring the financial stability of the wider system. EFAMA and AMIC welcome the principles-based approach taken by IOSCO in its recommendations for Liquidity Risk Management for Collective Investment Schemes. Both organisations believe it strikes the right balance between providing necessary guidance and preserving fund manager flexibility to act in the best interests of all shareholders in a variety of circumstances.