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Background
Following on from a consultation process earlier this year, ESMA
has published its final report on guidelines on liquidity stress
testing in UCITS and AIFs (the
"Guidelines") which set down minimum
standards for liquidity stress testing
("LST") in EU domiciled UCITS and AIF
funds.
The publication of the Guidelines follows an increased
regulatory focus on liquidity on a domestic front also. The Central
Bank of Ireland (the "Central Bank")
last month issued a "Dear CEO" letter to all UCITS
management companies and AIFMs ("Management
Companies")1 noting that it expects the
Board, relevant directors and designated persons of each Management
Company to assess on an ongoing basis the liquidity position of
each fund under management to ensure "that the liquidity of
the investment portfolio remains in line with the respective
fund's
