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ARTICLE · 03 MARCH 2017

Financial Stability Board Publishes Final Recommendations To Address Structural Vulnerabilities From Asset Management Activities

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On January 12, 2017, the FSB published a report on policy recommendations to address structural vulnerabilities from asset management activities.

United StatesFinance and Banking
A&O Shearman
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On January 12, 2017, the FSB published a report on policy recommendations to address structural vulnerabilities from asset management activities. The FSB recommendations aim to address four structural vulnerabilities from asset management activities that could cause financial stability risks: (i) liquidity mismatch between fund investment assets and redemption terms and conditions for fund units; (ii) leverage within funds; (iii) operational risk and challenges in transferring investment mandates or client accounts in stressed conditions; and (iv) securities lending activities of asset managers and funds. The FSB makes 14 recommendations, some of which have been amended since the proposed recommendations were consulted on in the last half of 2016. The recommendations are addressed to national supervisors of asset management activities and to the International Organization of Securities Commissions. Certain types of data are identified that the FSB considers should be

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