.jpg){kind=avatar}
.jpg){kind=avatar}
The SEC will vote this upcoming week about whether to require mutual funds to adopt liquidity risk management programs and bolster disclosures. The potential change is driven by concerns that funds may have trouble meeting redemption demands amid a market selloff, especially with more and more holding riskier assets.
Under the proposal, mutual funds could use swing pricing, effectively letting asset managers pass on trading costs to the investors who redeem. The mechanism is designed to keep shareholders from being diluted by purchases and redemptions, the SEC said in September 2015 when it agreed to propose the rules. SEC Chair Mary Jo White said last month in a speech that the proposals around liquidity management were among “several transformative rule makings to modernize our regulatory tools.”
unknownx500
