A regulator notifies European funds to better prepare for market shocks

The European Financial Markets Authority said yesterday that fund managers should improve their preparedness for shocks, after the repercussions of "Covid-19" on the markets in March revealed shortcomings.

Following a review of the sector, the authority added that funds exposed to the real estate sector and corporate debt have shown that they are able to adequately respond to redemption pressures with only a limited number of temporary suspensions.

"But the work revealed deficiencies that must be addressed in order to improve the funds' preparedness for future shocks," said the authority’s president, Stephen Major, to address potential liquidity risks in the funds sector.

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