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IOSCO Finalizes Framework to Evaluate Leverage in Investment Funds

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.

Primary Sources

  1. IOSCO Media Release: IOSCO launches framework for monitoring leverage in funds that may pose stability risks
  2. IOSCO Report: Recommendations for a Framework Assessing Leverage in Investment Funds

Tags

Regulated Activities
Risk Management
Regulated Entities
Adviser / CTA / CPO Investment Funds (SEC Exempt) Investment Funds (SEC Registered)
Body of Law
Securities Law
Jurisdiction
Global
Organization
Regulators' Associations
Sub-Author
IOSCO