International Organization of Securities Commissions publishes final revised liquidity risk management recommendations for collective investment schemes

The International Organization of Securities Commissions (IOSCO) issued a final report setting out revised recommendations for liquidity risk management for collective investment schemes (CIS), alongside implementation guidance to support adoption. The package is intended to operationalize the Financial Stability Board’s December 2023 recommendations on addressing structural vulnerabilities from liquidity mismatch in open-ended funds. The final report contains 17 recommendations across six areas covering CIS design, liquidity management tools and measures, day-to-day liquidity management practices, stress testing, governance, and disclosures to investors and authorities. The accompanying implementation guidance supplements the revised recommendations with more detailed guidance and good practices, and IOSCO encouraged regulators to promote implementation by responsible entities through appropriate requirements and ongoing supervision of liquidity management practices.