Réponse de l’AFG à la consultation FSB sur la gestion de la liquidité des fonds ouverts

The AFG has taken part at the consultation by the FSB, which proposed amending its 2017 recommendations on liquidity conditions offered by investment funds, particularly those investing in illiquid assets. The FSB suggests categorizing assets into three categories: liquid, less liquid, and illiquid, with a significant impact on the resulting liquidity that funds can offer to investors. Key changes involve a bucketing approach, anti-dilution measures, and disclosure mandates. Responses were accepted until 4 September 2023, with a final report due later this year.
In response, the AFG argues that asset liquidity is not a fixed concept, but constantly evolves. The AFG believes that the proposed investment limits could create significant threshold effects and exacerbate liquidity crises, as funds may be forced to sell temporarily illiquid assets to comply with the new rules. The AFG also expresses concern that leaving the definition of liquidity criteria to local regulators could lead to market fragmentation in Europe.
The AFG emphasizes that liquidity is already a key component of European UCITS regulations, and existing texts adequately regulate liquidity risk management in Europe. The AFG cites the European Securities and Markets Authority’s guidelines on liquidity stress tests as an example of satisfactory liquidity management measures.
The AFG argues against the proposed bucketing approach, stating that fixed thresholds cannot properly assess the liquidity of fund assets. Instead, the AFG suggests a continuous monitoring of asset valuation volatility and the entire portfolio. The AFG also raises concerns about the practical implementation of the proposed rules, particularly in relation to the redemption terms of funds.
While the AFG agrees with some of the revised recommendations, such as the extended use of liquidity management tools and the selection of anti-dilution tools for most funds, it believes that a one-size-fits-all approach is not suitable for all funds. The AFG recommends a more holistic and flexible approach to liquidity management, taking into account the specific characteristics of different asset classes.
The AFG also highlights the potential costs and operational risks associated with implementing anti-dilution tools, particularly for smaller asset managers. The AFG suggests that the implementation of such tools should be based on a cost-benefit analysis.
The AFG supports the need for regular peer reviews among jurisdictions and emphasizes the importance of consistency between redemption terms and asset liquidity. It also calls for attention to be given to liquidity on the liability side and the potential liquidity mismatch between assets and liabilities.