IOSCO – Review of implementation of Liquidity Risk Management recommendations and Market Participants´ responses to COVID-19 induced market stresses and issues recommendations to improve liquidity risk management for investment funds

March 5, 2021

Thematic Review
Conducted by the IOSCO assessment committee, aims to assess the extent to which recommendations have been implemented in regulatory frameworks. It also aims to gather some information about how the responsible entities, to whom the recommendations were directed, have then actually implemented them in practice. The thematic review report is expected to be published during the Autumn of 2022.

Joint Analysis
Alongside the thematic review, IOSCO and FSB are conducting a joint analysis of the use, availability, and impact of liquidity risk management tools in open-ended funds (OEFs). The joint analysis is examining the experience of OEFs that faced various redemption pressures during the Covid-19 induced market stresses of March 2020 and April 2020. Also looking at the availability, use, and impact on the broader market of liquidity risk management tools and how these were in fact then linked to the liquidity of the underlying assets.

Market Participants’ Survey
To inform both the thematic review and the joint analysis, IOSCO has issued a market participants’ survey, designed to collect certain information from responsible entities. This relates both on their adoption and practical implementation of recommendations and targeted information on their liquidity risk management practices and experiences.

The submission deadline for the market participants’ survey is April 16, 2021.

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