EU regulation for liquidity fees and redemption gates on many money-market funds will see fund managers adapting their product ranges and launching new vehicles, according to Fitch Ratings.
Under regulation from the European Commission, Parliament and Council which is set to come in by the end of 2018, constant net asset value (CNAV) funds will cease to exist and be limited to holding government debt. Instead, investors will be able to invest in low-volatility net asset value funds (LVNAV) which will hold a wider range of assets. There will be liquidity fees and redemption gates implemented on both of these products which are intended to limit customer redemptions in time of stress. Are firms complying with key responsibilities towards investors? However, Fitch sai...
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