EU Tells Managers To Test Funds’ Resilience To Redemptions

Law360, London (September 2, 2019, 2:12 PM BST) -- Europe’s fund managers were ordered Monday to test whether their investment vehicles can withstand the sort of payout requests that caused a prominent stock picker to suspend his fund in June.

The European Securities and Markets Authority set out guidance that will help managers to gauge the strength of funds that are subject to European Union rules, known as UCITS, as well as alternative investment funds. This will allow managers to safeguard their offerings from liquidity risks as well as preventing any threat to the wider EU market, the watchdog said.

ESMA told managers to test their funds against stressful scenarios,...

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