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ARTICLE · 05 APRIL 2021

Liquidity Management: The Regulatory Spotlight Remains

Dillon Eustace
Dillon Eustace
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The regulatory spotlight remains firmly on the adequacy of liquidity management implemented by fund management companies with both the Central Bank of Ireland (the "Central Bank")

IrelandFinance and Banking
Cillian Bredin
Cillian Bredin
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Background

The regulatory spotlight remains firmly on the adequacy of liquidity management implemented by fund management companies with both the Central Bank of Ireland (the "Central Bank") and ESMA recently publishing communications on the need for fund management companies to effectively manage liquidity risk arising in the portfolios of funds under management.

The Central Bank, which had previously written to fund management companies in August 2019 and April 2020 reminding them of the importance of effective liquidity risk management, has published a letter which it has sent to fund management companies which were surveyed as part of an ESMA co-ordinated exercise last year which focused on the preparedness of funds with significant exposure to corporate debt to potential future liquidity shocks (the "Central Bank Letter"). The Central Bank Letter follows the publication of ESMA's report in November 2020 which outlined its findings from the review conducted

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