KPMG welcomes the latest release from the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – providing an updated Liquidity Risk Management Guide (LRM Guide) for Managers and Supervisors of Managed Investment Scheme (MIS). This guidance considers the recommendations recently issued by international regulatory bodies (i.e. the Financial Stability Board and International Organization of Securities Commissions) and replaces the existing Good Practice Guide on effectively managing liquidity risk.
The LRM Guide emphasises the importance of effective liquidity risk management (LRM) in meeting statutory duties and acting in the best interests of investors.
It covers eleven key features with particular emphasis given to improving LRM frameworks, policies and procedures as well as regular stress testing and use of tailored Liquidity Management Tools.
While these are recognised as guidelines, in the event of a liquidity stress we expect the FMA to scrutinise the fund’s overall LRM framework.
This document provides a brief overview of the recent FMA guidance.
Get in touch
Rajesh Megchiani
Partner, Financial Risk Management
KPMG in New Zealand
Greg Scott
Director
KPMG in New Zealand
The FMA expects MIS Managers and Supervisors to review their systems against this guidance and tailor their LRM approach accordingly.
Please get in touch to discuss how we can support you navigate the requirements outlined in the guide.
