Quick Find:
  • News
  • AMIC & EFAMA publish report on leverage in investment funds
AMIC & EFAMA publish report on leverage in investment funds
19 July 2017  ICMA's Asset Management and Investors Council (AMIC) and the European Fund and Asset Management Association (EFAMA) have published today a report on leverage in investment funds. This paper analyses how leverage is used, how the European legislative framework regulates leverage, how international regulators are addressing this topic and how the risks related to leverage are addressed from a technical perspective.

The report also puts forward a number of recommendations to improve monitoring and analysis of leverage risk:
  1. The existing regulatory standards at the EU level can be the basis for developing, at global level, leverage and risk measurements through a matrix of different measures. This would allow a meaningful representation of a fund’s exposures, given that there is no single measure that can capture all the risks in nature, size and characteristics associated with a fund’s underlying assets and strategies;
  2. Further streamlining of global calculation methodologies for leverage and risk. Regulators should in that respect rely upon the existing EU regulatory regime;
  3. Adjustments and updates of these methods, particularly the 2010 CESR Guidelines, based on the best practices at EU level, could be envisaged if necessary; and
  4. Data sharing among regulators of already reported data is key and should be improved at both EU and global level. This would enable regulators to better assess the overall risks related to funds in Europe and globally.
The report is available here and the press release is available here.

ICMA Executive Education