ARTICLE
7 January 2022

IOSCO Assesses Risks Within Global Investment Funds Industry

CW
Cadwalader, Wickersham & Taft LLP

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Cadwalader, established in 1792, serves a diverse client base, including many of the world's leading financial institutions, funds and corporations. With offices in the United States and Europe, Cadwalader offers legal representation in antitrust, banking, corporate finance, corporate governance, executive compensation, financial restructuring, intellectual property, litigation, mergers and acquisitions, private equity, private wealth, real estate, regulation, securitization, structured finance, tax and white collar defense.
In an Investment Funds Statistics Report, IOSCO assessed the risks within the global investment funds industry.
United States Finance and Banking

In an Investment Funds Statistics Report, IOSCO assessed the risks within the global investment funds industry.

IOSCO reported that leverage across the global investment funds industry is relatively low. IOSCO found that:

  • hedge funds have sufficient portfolio liquidity to meet liquidity demands by investors during normal times;
  • open-ended funds ("OEFs") do not have large aggregate exposures through derivative positions, so they are not meaningfully leveraged by any metric; and
  • using the metrics in the report, closed-ended funds ("CEFs") exhibit little to no leverage.

The report includes analyses of hedge funds, OEFs and CEFs. The report's purpose was to facilitate the regular collection and analysis of investment fund data that would enable regulators to share information and observe trends regarding trading activities, leverage, liquidity management, markets and funding by investment funds globally.

Primary Sources

  1. IOSCO Media Release: IOSCO Report Provides New Global-Level Data on Global Investment Funds Industry
  2. IOSCO Investment Funds Statistics Report

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