The Financial Stability Board (FSB) has consulted on policy recommendations for
addressing structural vulnerabilities from asset management
activities. This follows a long debate at international level
involving both the FSB and the International Organization of
Securities Commissions (IOSCO). The FSB's proposed
recommendations relate to risks arising from liquidity mismatch,
leverage, operational issues in transferring investment mandates in
stressed conditions, and indemnifications related to securities
lending.
The full impact on firms will not be known until the details are
fleshed out but the FSB's consultation provides an important
indication of the direction of travel. The FSB's proposals are
broadly in line with recent messages from regulators such as the
Financial Conduct Authority (FCA), which published good practices for liquidity management for
investment firms in February 2016, the Bank of England (BoE), which
published the Financial Policy Committee's
