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Investment Company Liquidity Risk Management Programs FAQs


The SEC’s Division of Investment Management has prepared a series of frequently asked questions to address the investment company liquidity risk management (“LRM”) program requirements implemented in October 2016.  The responses reflect the views of the staff of the Division of Investment Management and are not considered to be a rule, regulation or statement of the Commission.  The Commission has neither approved nor disapproved the information provided.


Throughout the FAQs, the staff references the Adopting Release for investment company LRM programs and defines “rule” as Rule 22e4: the liquidity rule.  The Liquidity Rule requires non-money market mutual funds and certain exchange-traded funds (ETFs) to implement a LRM program designed to reduce the risk of funds unable to meet their redemption obligations and to moderate the dilution of the interests of fund shareholders.  The frequently asked questions specifically address two main topics: (1) sub-advised funds; and (2) in-kind transfers of securities and other assets (like In-Kind ETFs).

Please refer directly to the Investment Company Liquidity Risk Programs FAQs article for the full responses provided by the SEC’s Division of Investment Management staff.


Fairview® is available to assist clients with any questions or concerns regarding liquid risk management and will continue to provide any new information regarding LRM as it becomes available.

By | 2019-06-06T20:39:59+05:00 Jan 31st, 2018|Fairview® Flash Reports, Mutual Fund and Institutional Issues|

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