Asset managers in the US may face bank-style stress tests and a ban on the use of derivatives in retail funds in the latest initiative proposed by the Securities and Exchange Commission (SEC).
The US regulator announced major plans to increase risk control of asset management firms on Thursday in a bid to reduce the risks faced by this part of the financial industry, the Wall Street Journal reports. These could include subjecting asset management groups and exchange traded funds to stress tests to ensure they could withstand another financial crisis, and forcing them to outline plans to unwind the business in case of a 'major distruption' to their operations. SEC chairwoman Mary Jo White said the regulator wants fund groups to better manage investment risks, testing them to...
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