ARTICLE
17 December 2019

IOSCO Finalizes Framework To Evaluate Leverage In Investment Funds

CW
Cadwalader, Wickersham & Taft LLP

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IOSCO finalized a framework to evaluate leverage in investment funds that pose potential risks to financial stability.
United States Corporate/Commercial Law

IOSCO finalized a framework to evaluate leverage in investment funds that pose potential risks to financial stability.

The final framework includes a two-step process intended to achieve a "meaningful" and "consistent" analysis of global leverage. In the first step, regulators may use Gross Notional Exposure ("GNE") or adjusted GNE to identify funds likely to pose "stability risks." In the second step, regulators will perform a risk-based analysis of the funds identified in step 1.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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