CySEC – Liquidity Stress Testing apply from 30th Sep 2020

The Cyprus Securities and Exchange Commission (CySEC) issued Circular C403, and urges the

  1. Alternative Investment Fund Managers (AIFMs), and
  2. UCITS Management Companies

to comply with the Liquidity Stress Testing (LST) guidelines issued by the European Securities and Markets Authority (ESMA).

The guidelines are set to take effect on the 30th of September, 2020 and in earlier commentary the team at SALVUS discusses

  1. The objectives of the liquidity stress testing
  2. Who is in the scope of the new guidelines,
  3. The fund managers’ obligations,
  4. The depositaries and NCA’s (and CySEC) obligations.

It is evident that the purpose of these Guidelines is to establish consistent, efficient and effective supervisory practices. At the same time, to ensure uniform and consistent application of the LST within the Europepan Union.

SALVUS risk management specialists are here to assist you on

  • Gap-analysis of your current liquidity stress testing policy against the new ESMA guidelines,
  • Designing your liquidity risk models and stress tests,
  • Drafting or updating your LST policy,
  • Reviewing and validating your LST models and assumptions.

Talk to us. We will be glad to support you in finding a solution appropriate or answering your questions.


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