The SEC today unanimously finalized its proposal (see FSM Report LIQUIDITY22) for liquidity risk management at open-end funds and separately approved by a 2-1 margin a rule permitting certain open-end funds to utilize swing pricing. The final liquidity risk management standards are less stringent than proposed, allowing funds greater flexibility regarding the classification of asset liquidity and the types of assets funds may purchase to improve liquidity. Despite approving swing pricing, all three Commissioners expressed concerns with it and the final rule thus includes additional restrictions; the SEC will also review its effects after funds begin offering swing pricing. This report analyzes today’s meeting; FedFin will shortly provide clients with an in-depth analysis of the rule.
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