c)  The proposals on stress tests are less onerous than feared and recognise the difficulty of a "one size fits all approach". The report states, "Given the diversity of the CIS universe, stress testing arrangements, as further set out below, should be appropriate for the size, investment strategy, underlying assets and investor profile of the CIS, taking into account other relevant market and regulatory factors. For instance, fund level stress tests may not be required where this would be disproportionate taking into account the size, investment strategy, nature of the underlying assets and investor profile of the CIS."

d)  The comments on enhancing governance, particulalry in the area of product design should not come as a surprise and we would suggest follow the broad direction of travel of the EU MiFID II Directive and the FCA's Asset Management Review.

We will continue to montor developments and provide updates.

The original 2013 Liquidity Report took into account the lessons learned from the financial crisis of 2007-10 and reflected the approach taken by member jurisdictions having responded to those events. You can read our thoughts on the tenth anniversary of the 2007 credit crunch here.

12th February 2018

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