Bank-loan funds in the dark over liquidity rules

Haziness in SEC requirement on ‘highly liquid’ assets could leave funds open to litigation

Managers are fearful of setting the threshold for liquid assets too low

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

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here