Fund Liquidity – An Overview of Key Guidance Issued

In the last few years, regulators have increased their focus on fund liquidity management, initially in 2019 in response to a number of high profile liquidity issues affecting UCITS funds and in 2020 and 2021 as a result of the impact of COVID-19 pandemic on the asset management industry and the wider global economy. In its recently published Securities Markets Risk Outlook Report, the Central Bank set out its expectations for fund management companies ("FMCs") in respect of fund liquidity. The Central Bank states that FMCs should have regard to a number of reports, recommendations and industry letters issued by the Central Bank, ESMA and the European Systemic Risk Board ("ESRB") in relation to fund liquidity management.

In this update, we provide an overview of this and other guidance and proposals issued that FMCs should note in relation to fund liquidity management.

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