EU regulators unite for UCITS liquidity risk supervision

Asset managers across the bloc set to be hit with new data requests

National securities regulators across the EU are to unite on a common approach to supervising liquidity risk on UCITS-regulated funds, with a "large majority" of asset managers across the bloc set to be hit with new data requests.

UCITS fund liquidity fell firmly under the regulatory spotlight in 2019 as UK regulators criticised weaknesses in the structure, which the Financial Conduct Authority said was too "rules-based" and ultimately contributed to the gating of the Woodford Equity Income fund. Will the EU be forced to review UCITS liquidity requirements? The UCITS framework includes a broad range of liquidity risk management provisions which aim to ensure UCITS investors can redeem their investments on request, notably including the now-infamous ‘10% rule' which defines the maximum allocation to unlisted ass...