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ARTICLE · 20 FEBRUARY 2019

ESMA Consults On Liquidity Stress Testing For UCITS And AIFs

Arthur Cox
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Liquidity risk in funds has and continues to be a subject of focus for both national and international regulators/authorities. In April 2018, the European Systemic Risk Board ("ESRB") ...

IrelandFinance and Banking
Arthur Cox
Arthur Cox
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Liquidity risk in funds has and continues to be a subject of focus for both national and international regulators/ authorities. In April 2018, the European Systemic Risk Board ("ESRB") published recommendations on how to address liquidity and leverage risk in investment funds. Included in these recommendations was a request that ESMA develop guidance for fund managers of both UCITS and AIFs with regard to liquidity stress testing ("LST") based on the stress testing requirements set out in AIFMD and how market participants carry out stress testing. Accordingly, ESMA has developed and launched (on 5 February) a public consultation on 14 draft guidelines ("Guidelines"). The Guidelines require that LST should:

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This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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