Funds ring alarm on EU guidelines for liquidity stress-testing

Managers could be forced to use multiple methods to stress-test large number of funds every quarter

Funds are worried about some of Esma’s proposed guidelines for liquidity stress tests

Parts of draft European Union guidelines on liquidity stress-testing (LST) for funds are overly prescriptive and may result in excessively frequent tests, according to people in the industry.

I think the general tone set by Esma with the LST consultation is largely reasonable, but there are still some aspects that need clarification and some that may be challenging to implement,” says Stéphane Janin, head of regulation at Axa Investment Managers.

The consultation by the European Securities

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