UK regulator orders investment funds to improve liquidity management


LONDON (Reuters) – Britain’s Financial Conduct Authority (FCA) on Thursday sanctioned some asset managers for failing to properly manage liquidity, stabilizing markets and allowing investors to withdraw money. announced that it poses a risk to its capacity.

The shutdown of UK property funds and the difficulties faced by debt-driven investment funds last September put a spotlight on asset managers’ ability to rake in enough cash to meet investors’ redemption and collateral demands. there is

The Observatory found that while some companies set very high standards in their reviews of asset managers, most fell short in some aspects of liquidity management, and a minority It said the framework for managing sexual risk was found to be inadequate.

“Currently, gaps in liquidity management have been identified, which could lead to risks of injury to investors,” the FCA said in a statement.

The FCA said regulators had already asked companies to review their liquidity arrangements in 2019 and asset managers’ boards should study the results of the review.

“It is critical that outliers act quickly, as they do not seize this opportunity to address their weaknesses or risk regulatory intervention,” he added.

It also says asset managers should diligently conduct liquidity stress tests and use liquidity management tools appropriately.

With some funds struggling to meet their daily redemption promises in a tense market, global regulators Wednesday introduced a new system to classify open-ended funds for failing to meet their daily redemption promises. proposed.

“It is important that the redemption of the fund is in line with the terms and conditions of the fund’s distribution,” the FCA said.

“In addition, investors should be able to redeem at an accurate price that reflects the value of their investment, ensuring fairness for both remaining and redeeming investors in the fund,” the FCA added.

Reporting by Hugh Jones Editing by Mark Potter

Our standards: Thomson Reuters Trust Principles.

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