Global regulators unveil revised rules to prevent liquidity mismatches in open-ended funds

FSB and IOSCO

The G20’s Financial Stability Board (FSB) and International Organisation of Securities Commissions (IOSCO) have published their final recommendations for open-ended fund managers to strengthen their liquidity management practices.

In the final report, which incorporates feedback from the public consultation launched this summer, the regulatory bodies set out their revised policy rules to address the structural vulnerabilities from liquidity mismatch in open-ended funds. "The goal of the revised FSB recommendations, combined with the new IOSCO guidance on anti-dilution LMTs, is a significant strengthening of liquidity management by OEF managers compared to current practices," the FSB said.  Regulators have been closely scrutinising the ability of open-ended funds to meet a surge of redemption requests during a m...