Regulatory Alerts2022-07-01
AFM Position Paper on Mitigating Systemic Risk in Investment Funds
The Dutch Authority for the Financial Markets (AFM) issued this July 2022 position paper to outline macroprudential policy principles for mitigating systemic risks within the asset management sector. The regulator advocates for a three-pillar approach comprising prudent fund design, proactive ongoing risk management, and discretionary macroprudential tools for National Competent Authorities. These measures aim to address liquidity mismatches and leverage risks that can trigger fire sales and amplify market-wide shocks during periods of financial stress.
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