The Securities and Exchange Commission (SEC) has proposed a set of liquidity risk management requirements for registered open-end mutual funds and ETFs. The proposal is part of a broader SEC agenda to modernize the Investment Company Act of 1940 (’40 Act) and to address perceived systemic risk concerns relating to the asset management industry.
1. The proposal addresses liquidity concerns arising in a changing industry. The proposal is a response to recent changes in the asset management industry, including the growing presence of mutual funds in the fixed-income space (now holding nearly 20% of US corporate debt; up from 7% … Read more