Regulatory Alerts2019-12-20
Circular CSSF 19/733 – IOSCO recommendations on liquidity risk management for open-ended undertakings for collective investment
The Luxembourg Commission de Surveillance du Secteur Financier issued Circular CSSF 19/733 to implement IOSCO recommendations into local regulation for investment fund managers managing open-ended undertakings for collective investment. The circular mandates that these entities establish robust liquidity risk management processes covering fund design, day-to-day monitoring, and contingency planning to safeguard investor interests and maintain financial stability. It requires regular stress testing, appropriate use of liquidity management tools, and effective disclosure of liquidity risks to ensure funds can meet redemption obligations under both normal and stressed market conditions.
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