The International Organization of Securities Commissions (IOSCO) has published its final report containing revised recommendations for liquidity risk management for collective investment schemes (CIS), accompanied by implementation guidance and a press release. The updated recommendations, which revise IOSCO's 2018 report, are aimed to enhance the resilience of open-ended funds in both normal and stressed market conditions by strengthening liquidity management practices across the product lifecycle. The report has included revised recommendations across six key areas: the CIS design process; liquidity management tools and measures; day-to-day liquidity management practices; stress testing; governance and disclosures to investors and authorities. Key revisions to the recommendations include clarifications on the definitions of common components of open-ended funds structure, the introduction of new liquidity management measures such as "soft closures" and "deferral of redemptions" and enhanced governance and disclosure requirements, among other things. IOSCO states that the implementation guidance should be read alongside the revised recommendations as it provides more detailed guidance and practices for effective implementation. IOSCO expects securities regulators to actively promote the implementation of these recommendations and will review progress by the end of 2026.
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