Fund fears linger over guidelines set to avert fire sales

Final Esma framework allays some European asset managers’ concerns

When an investment fund starts to have liquidity issues, the problem can magnify rapidly. What starts as a dry patch can soon become a forest fire, as this summer’s run on Woodford illustrated. When the firm gated its flagship equity income fund in June, preventing investors from redeeming, selling or transferring shares, it thrust liquidity stress-testing into the limelight. Months later, the fund is still closed for investing or redemptions, as managers try to reposition from illiquid

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