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Bank-loan funds in the dark over liquidity rules

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

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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

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