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Version date: 13 July 2020 - onwards
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ID 1097 (Last update: 13/07/2020)

Q. Should a UCITS Management Company conduct liquidity stress testing at the design phase of the fund's lifecycle?

A. Yes. ESMA's Guidelines on liquidity stress testing in UCITS and AIFs set out that liquidity stress testing should, where appropriate, be employed at all stages in a fund's lifecycle. The use of liquidity stress testing at the design phase of a UCITS' lifecycle should be carried out to adequately understand the potential risks that may impact the UCITS, in various market conditions, throughout its lifecycle.

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