IOSCO defended its 2018 Liquidity Risk Management
("LRM") recommendations for investment funds against
recent criticism, reasserting that the recommendations offer
regulators a "comprehensive framework" for liquidity
risks in investment funds.
As previously covered, IOSCO provided
recommendations for entities responsible for managing collective
investment scheme operations. The LRM recommendations addressed,
among other things, (i) liquidity incongruence between fund
investments and redemption terms and conditions for open-ended
funds ("OEFs"), (ii) leverage within investment funds,
(iii) operational risks and challenges in transferring investment
mandates in stressed conditions, and (iv) the securities-lending
activities of asset managers and funds.
