IOSCO is consulting on draft principles that should apply when open-ended investment schemes suspend redemptions. It has looked at the practices in various jurisdictions and drafted principles to cover:
- management of liquidity risk;
- criteria/reasons for suspension;
- decision to suspend; and
- during the suspension.
It recognises national supervisors should apply the principles according to local conditions. It asks for comment by 30 May. (Source: IOSCO/MS/04/2011 and Principles on Suspensions of Redemptions in Collective Investment Schemes)