Asset Management & Investment Funds Q&A: Sept 2019

Question

What is the latest update on requirements for liquidity risk management?  

Answer

In August 2019, the Central Bank of Ireland (CBI) issued a letter reminding UCITS management companies, SMICs, AIFMs and internally managed AIFs (Fund management companies or FMCs) of the importance of ongoing and effective liquidity management. This was discussed in our August bulletin.

On 2 September 2019, ESMA issued its final guidelines on liquidity stress testing in UCITS and AIFs. The guidelines become effective on 30 September 2020. They apply to FMCs.

Liquidity management for investment funds is a current priority on the regulatory agenda in Ireland and the rest of Europe, even though the effective date of the ESMA liquidity guidelines is 12 months from now. We expect the CBI to notify ESMA that it intends to comply fully with the guidelines.

FMCs will need to assess the requirements in the ESMA liquidity guidelines against their current liquidity risk management practices, policies and reporting before the 30 September 2020 deadline. 

Read our In Focus paper for more information on this topic. 

For more information in relation to this topic please contact your usual contact on the A&L Goodbody Asset Management & Investment Funds team.

Date published: 26 September 2019