IOSCO Issues Recommendations On Fund Liquidity Risk Management

The International Organization of Securities Commissions ("IOSCO") published two reports relating to liquidity risk management for collective investment schemes ("CIS"). The first provides recommendations for entities responsible for managing CIS operations (the "Recommendations Report"), and the other outlines good practices and other issues for future consideration (the "Good Practices Report"). The reports incorporate feedback from a consultation report published in July 2017.

The Recommendations Report (Recommendations for Liquidity Risk Management for Collective Investment Schemes) sets forth 17 recommendations and highlights three particular challenges:

• If a CIS offers daily dealing, it is important to ensure that other design features are significantly robust to ensure alignment of the daily dealing feature with the liquidity of assets of the CIS.