New FMA guidelines tackle 'over-optimism' in liquidity risk management

Poor liquidity risk management could force fund managers to sell less liquid assets, such as property investments, for whatever price they could get. (Image: NZME)

Staff reporters

Fri, 29 Sep 2023

The Financial Markets Authority says it's concerned about over-optimism and complacency in liquidity risk management, as it consults on updated guidelines for fund managers.The authority's proposed guidance for managed investment schemes will replace the existing 2020 good practice guide for liquidity risk management (LRM).In 2021, the authority ran a self-assessment survey of 51 registered managed investment scheme managers on their LRM, and found many were overly optimistic, when compared with the detail of their responses. Even...

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