The SEC’s Proposed New Rules for Liquidity Risk Management: What You Need to Know

On September 22, the U.S. Securities and Exchange Commission (SEC) voted to propose new rules for promoting effective liquidity risk management by open-end and exchange-traded funds. If adopted, these rules would require mutual funds and ETFs, except money market funds, to establish a liquidity risk management program and enhance disclosure on fund liquidity.

Please join us for a webinar where we will discuss how the proposed rules would impact a fund's liquidity risk management program and how MSCI's multi-asset class liquidity risk analytics can serve as the foundation for an effective liquidity risk management program that aims to satisfy the proposed regulations.

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Please note that we have clarified the settlement handling on 15% Standard Assets on slide 10. As pointed out to us by a participant, the proposed regulations would not require the fund to take into account settlement periods when determining whether an asset is a 15% standard asset. Therefore, loans would be treated the same as any other asset when determining whether they are 15% standard assets. Further, the SEC states that the 15% standard asset cap “would be an important limitation on certain relatively illiquid holdings in funds’ portfolios, such as private equity investments, securities acquired in an initial public offering, and real estate assets”.

We apologize for any potential confusion, the slides distributed already have the above correction.