Thursday 2 August 2012
IMA: IOSCO MAKES STRONG PROGRESS ON FUND LIQUIDITY MANAGEMENT PRINCIPLES
The IMA (Investment Management Association) has today submitted its response to the International Organization of Securities Commission’s (IOSCO) proposals for liquidity risk management in Collective Investment Schemes (CIS).
The IMA welcomes IOSCO’s initiative in setting out proposed principles for the management of liquidity. These are in keeping with UK regulatory standards and reflect existing industry practice for UK-authorised funds. There is, however, one important aspect that IOSCO’s work does not cover; namely, the management of inflows. IOSCO’s proposals cover solely the management of liquidity to meet redemptions. It is equally important to manage money coming into a fund. Managers of UK funds do this as a matter of course and it should be reflected in the principles.
The IMA also recommends that IOSCO encourages regulators to review the efficacy of liquidity management tools available to managers for both inflows and outflows. Regulators should, for example, make sure that managers have the ability to cease selling units where it is in the best interests of the fund and existing investors.
Julie Patterson, IMA Director of Authorised Funds and Tax, said:
“IOSCO’s proposals reflect current UK rules, well-established IMA member guidance and UK industry practice. We welcome them.
“We note, though, that it is in the best interests of investors for IOSCO’s principles to cover periods of both high inflows and high outflows, and that managers should have the tools to manage both scenarios.”
Read the full text of the response here.
For further information please contact:
Mona Patel, Head of Communications
020 7831 0898 or 07834 089332
Navdeep Sidhu, Press Officer
020 7831 0898 or 07843 517 618
Christina Bridge, Press Assistant
020 7831 0898
About the Investment Management Association
- The IMA is the trade body for the UK's £3.9 trillion asset management industry (retail and institutional) which is one of the world's leading investment management centres.
- Our role is to represent the interests of the asset management industry to government and regulators both in the UK and internationally.
- The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.