FundRock, a European third-party UCITS management company (ManCo) and alternative investment fund manager (AIFM), has introduced a holistic liquidity management service to assist asset managers during the COVID-19 crisis and to prepare them for new European regulations.
The rollout of the service is available to EU and non-EU asset managers managing EU funds for which FundRock is not acting as Man Co/AIFM.
Its launch comes at a time when regulators around the world are preparing to implement new guidelines for liquidity management.
FundRock’s risk management specialists will work with portfolio managers and fund directors to monitor the liquidity of funds across all jurisdictions globally.
Meanwhile, the team’s analysis will rapidly determine how quickly assets could be sold, the value of those assets and transaction costs that would be incurred.
According to FundRock, the analysis will confirm what, if any, liquidity management tools should be invoked. It will also carry out additional stress testing of the portfolio.
Additionally, at a time when regulators including competent authorities in Luxembourg and Ireland are requesting regular liquidity management reports from managers,
FundRock explained that the new unbundled service will ensure that data developed from FundRock’s independent portfolio liquidity monitoring and reporting can be easily integrated into the new regulatory reporting templates.
Xavier Parain, CEO of FundRock, commented: “The COVID-19 crisis has highlighted once again the vital importance of liquidity management to asset managers, investors and capital markets.”
Parain continued: “Policymakers and regulators recognise that asset managers should develop, test and where necessary deploy liquidity management tools, and our service will provide them with the data and analytics to enable them to make the most informed and timely decisions possible. This ultimately will preserve capital, benefiting fund investors, and will help regulators mitigate systemic risks.”
The adoption by asset managers of new liquidity management guidelines, developed by the International Organization of Securities Commission, the global association of securities and futures market regulators, will become a regulatory requirement in the European Union from September 2020 under rules being implemented by the European Securities and Markets Authority.
FundRock added: “The impact of the COVID-19 crisis on portfolio liquidity means that many hedge fund managers, private equity firms, real estate investment managers and other asset managers are intending to comply with the guidelines well before September.”
