SEC Proposes Liquidity Management Rules for Mutual Funds and Exchange Traded Funds

September 28, 2015

Client Alert
The Securities and Exchange Commission recently proposed new rules and amendments designed to enhance liquidity risk management requirements for certain open-end management investment companies, including mutual funds and exchange-traded funds but excluding money market funds. Under the Proposal, covered funds would be required to implement liquidity risk management programs and enhance disclosure regarding fund liquidity and redemption practices. The Proposal also provides a framework under which certain open-end funds (excluding ETFs) could elect to use “swing pricing” to effectively pass on transactional costs stemming from shareholder purchase or redemption activity to the shareholders associated with that activity.

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