"Assessing Liquidity Risk in Asset Management - The FCA's Warning to Outliers"

The Financial Conduct Authority (FCA) has conducted a review of liquidity management among asset managers, and determined that some firms fail to meet the required regulatory standards and that this could lead to investor harm. The issues have been highlighted in a letter sent out to boards of asset managers urging them to take action. The review has identified areas of good practice in the sector which should be taken into account. Poor liquidity management poses serious risks for investors and undermines market stability. As such, the FCA is calling on these asset managers to ensure they are meeting regulatory standards, as they risk intervention if they do not address any weaknesses. The review finds that improving liquidity risk practices would also help promote competition and growth in the UK economy.