CSA – Canadian Securities Regulators Publish Liquidity Risk Management Guidance for Investment Fund Managers

September 18, 2020 – Regulators published CSA staff notice 81-333 for investment fund managers (IFMs). CSA staff notice was issued to provide guidance to IFMs on developing and maintaining an effective liquidity risk management (LRM) framework for certain investment funds.

Aimed at investment funds subject to NI 81-102, but maybe relevant for others also. CSA BC, CSA OSC, CSA ALB, CSA NVS, CSA Que, and CSA NBW reported the guidance.

Liquidity Risk Management

Notice covered both the international and domestic securities regulatory landscapes. Guidance identified 5 key elements to develop and maintain an effective LRM framework. Elements include strong and effective governance, ongoing maintenance, stress testing, disclosure of liquidity risks, and use of LRM tools to manage liquidity issues.

Relayed CSA expectation for each IFM to establish and maintain an effective LRM framework with IFM statutory conduct standards, NI 31-103, and NI 81-10 obligations.

For more information, visit www.osc.gov.on.ca

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