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    MAS Issues Guidelines for Liquidity Risk Management by Fund Managers

    August 16, 2018

    MAS issued the final guidelines on liquidity risk management practices for fund management companies, with respect to the management of collective investment schemes (CIS). These guidelines have been issued pursuant to section 321 of the Securities and Futures Act (SFA). Draft amendments to the Code on Collective Investment Schemes (CIS Code) have also been published, along with the MAS feedback to the responses received to the consultation on the guidelines and CIS code amendments. The effective date of the revised CIS Code is August 17, 2018, except for the revisions to paragraph 8.8 of Appendix 1 and paragraph 11.1(c)(v) of Appendix 6, which will take effect for the first annual report relating to their respective financial year ending on or after December 31,2018.

    These guidelines should be read in conjunction with the provisions of the SFA, the SF(LCB)R, CIS Code, along with the other relevant legislation and other guidelines and frequently asked questions (FAQs) issued by MAS. The guidelines aim to promulgate sound liquidity risk management practices that fund management companies should adopt, where appropriate, to minimize the risk of investor detriment due to mismatches in the liquidity profile of the assets in the CIS and its redemption terms. Additionally, amendments to the CIS Code seek to enhance the resilience of money market funds to liquidity risks and strengthen their ability to meet redemption requests from investors, especially during stressed market situations. The consultation on these guidelines and the draft amendments to the CIS Code ran from October 26, 2017 to November 28, 2017. After considering the feedback received, MAS has made further revisions to the guidelines, where appropriate.

     

    Effective Date: August 17, 2018 (CIS Code Amendments)

    Keywords: Asia Pacific, Singapore, Banking, Liquidity Risk, MMFs, CIS, Fund Management Companies, MAS

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