Coronavirus (COVID-19)—key issues for fund managers

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Coronavirus (COVID-19)—key issues for fund managers
  • Liquidity management
  • Property fund suspensions
  • Repo use for liquidity management
  • Funds with exposures to corporate debt and real estate assets
  • Money market funds
  • Risk management
  • Limits on value at risk (VaR)
  • Operational considerations
  • Virtual general meetings
  • More...

Coronavirus (COVID-19)—key issues for fund managers

As a result of coronavirus (COVID-19) pandemic, investment funds have faced challenges both operationally and as a result of significantly increased volatility in global markets. The pandemic, in combination with high volatility and inherent valuation issues that it has triggered, has led to large market corrections and a deterioration of liquidity risks, which in turn has prompted stress in different parts of the financial system, including in some segments of the investment fund sector. These issues are summarised in a joint committee report on risks and vulnerabilities in the EU financial system, which was published by the European Securities and Markets Authority (ESMA) and the other European Supervisory Authorities (ESAs) in September 2020.

The Financial Conduct Authority (FCA) has published guidance setting out its expectations regarding funds in light of coronavirus. While it acknowledges the significant challenges firms are facing in the current environment, it nevertheless expects them to continue to uphold the best interest of their investors at all times. ESMA and the Investment Association (IA) have also published guidance, and the European Systemic Risk Board (ESRB) has adopted a recommendation on liquidity management.

This Practice Note provides a summary of the impact of coronavirus on fund managers in the UK and EU, including statements and guidance from the FCA, ESMA, the ESRB and the IA. For information on the

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