Bank-loan funds in the dark over liquidity rules
Haziness in SEC requirement on ‘highly liquid’ assets could leave funds open to litigation
US bank-loan funds are struggling to comply with new rules from regulators that require them to hold a buffer of highly liquid assets in their portfolio, but leave it unclear where that buffer should be set.
Managers fear they could face litigation from end-investors if they set the liquidity threshold too low and subsequently are unable to meet redemptions in a crisis.
“[This] leaves us vulnerable to having a different interpretation [of the rule]. And with a negative outcome, that could lead
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