ESMA consults on guidance to address leverage risk in the AIF sector

27 March 2020

Metadata
Provider: 
ESMAESMA
URL: 
https://www.esma.europa.eu/press-news/esma-news/esma-consults-guidance-address-leverage-risk-in-aif-sectorhttps://www.esma.europa.eu/press-news/esma-news/esma-consults-guidance-address-leverage-risk-in-aif-sector
Retrieved on: 
Saturday, March 28, 2020
Information
Tags: 
Economy, Money, Finance, Financial markets, European Union, Insurance industry, Systemic risk, European Securities and Markets Authority, Alternative investment, Investment fund, Leverage, Financial risk
Summary
Key Points: 
  • 27 March 2020

    Fund Management

    The European Securities and Markets Authority (ESMA), the EU securities regulator, has today launched a public consultation on its draft guidance to address leverage risks in the Alternative Investment Fund (AIF) sector.

  • The consultation is part of the ESMA response to the recommendations of the European Systemic Risk Board (ESRB) in April 2018 to address liquidity and leverage risk in investment funds.
  • Steven Maijoor, Chair, said:

    In situations when financial markets are under severe stress, highly leveraged alternative investment funds can further amplify systemic risk.

  • Next steps

    ESMA is seeking stakeholders feedback on the proposed principles to set leverage limits under Article 25 of Directive 2011/61/EU.

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