2017年-FSB全球金融稳定委员会_Policy_Recommendations_to_Address_Structural_Vulnerabilities_from_Asset_Management_Activities_50页_633kb

Summary of Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities

Core Content

The document outlines final policy recommendations from the Financial Stability Board (FSB) aimed at addressing structural vulnerabilities in the asset management sector that could pose risks to global financial stability. These recommendations focus on four key areas: liquidity mismatch, leverage within funds, operational risk, and securities lending activities. The FSB's work is part of a broader effort to ensure the resilience of the financial system in the face of evolving market structures and increasing asset management activities.

Main Viewpoints

• Asset Management Growth: The sector has experienced significant growth in assets under management (AUM), reaching $76.7 trillion by 2015, which accounts for 40% of global financial system assets. This growth has been driven by increased investment in less liquid asset classes and the expansion of low-cost funds like ETFs.

• Structural Vulnerabilities: The FSB has identified four key structural vulnerabilities:

  • Liquidity mismatch between fund investments and redemption terms.
  • Leverage within investment funds.
  • Operational risk in transferring investment mandates during stress.
  • Securities lending activities of asset managers and funds.

• Policy Focus: The recommendations are designed to establish a general framework for national and regional authorities to monitor and mitigate these risks through data collection, risk management tools, and regulatory coordination.

Key Information

1. Liquidity Mismatch

• Vulnerability: Open-ended funds may face liquidity mismatch due to the difference between the liquidity of their investments and the daily redemption terms.
• Existing Mitigants: Regulatory frameworks require asset managers to ensure funds can meet redemption requests, impose asset investment limits, and mandate liquidity management processes such as holding liquid assets, stress testing, and using liquidity risk management tools (e.g., swing pricing, side pockets, gates).
• Residual Risks: Large redemptions from funds could lead to significant asset sales, especially in less liquid markets, which may cause market volatility, price declines, and liquidity strains.
• Policy Recommendations:
  • Recommendation 1: Authorities should implement consistent reporting requirements to facilitate cross-jurisdictional monitoring of financial stability risks.
  • Recommendation 2: Improve disclosure to investors with information useful for their investment decisions.
  • Recommendation 8: Authorities should provide guidance on the use of exceptional liquidity management tools during market dislocations or stress.
  • Recommendation 9: Emphasize the need for coordination in conducting system-wide stress tests.

2. Leverage within Funds

• Vulnerability: Leverage used by investment funds, especially through derivatives, can contribute to systemic risk.
• Existing Mitigants: Various measures are in place to limit leverage, including investment strategy constraints and regulatory oversight.
• Residual Risks: Excessive leverage can amplify market volatility and lead to financial instability, particularly in stressed conditions.
• Policy Recommendations:
  • Recommendation 10: IOSCO should develop consistent measures of leverage in funds to support financial stability assessments.
  • Recommendation 12: Funds using significant leverage should be subject to additional scrutiny.

3. Operational Risk

• Vulnerability: Operational challenges in transferring investment mandates during financial stress could disrupt market functions.
• Existing Mitigants: Asset managers are expected to have robust risk management frameworks, and some jurisdictions have specific rules on transferring mandates.
• Residual Risks: Distress in transferring mandates could lead to market instability and systemic effects.
• Policy Recommendations:
  • Recommendation 13: Authorities should ensure all asset managers have comprehensive and robust risk management frameworks.

4. Securities Lending Activities

• Vulnerability: Securities lending by asset managers can create risks if they provide indemnifications to clients.
• Existing Mitigants: Some jurisdictions have rules on securities lending and indemnification.
• Residual Risks: Indemnification practices could expose asset managers to significant financial risks.
• Policy Recommendations:
  • Recommendation 14: Authorities should consider applying similar risk mitigation approaches to other areas where asset managers take on financial risk as principals.

Additional Information

• Pension Funds and Sovereign Wealth Funds (SWFs): These entities may pose financial stability risks depending on their size and legal structure. Their assessment will be revisited in conjunction with IOSCO when reviewing NBNI G-SIFI methodologies.
• Implementation: Some recommendations will be operationalized by IOSCO, while the FSB will continue to monitor progress and implementation.
• International Consistency: The FSB emphasizes the need for forward-looking and internationally consistent policy responses to address these structural vulnerabilities.

Conclusion

The FSB's policy recommendations aim to enhance the resilience of the financial system by addressing structural vulnerabilities in the asset management sector. These include improving liquidity management, regulating leverage, managing operational risks, and reviewing securities lending practices. The recommendations are designed to support authorities in monitoring and mitigating risks through data collection, risk assessment, and coordinated regulatory actions.