Pugliese Quoted on How SEC Extension Leaves Programs Undefined


Pugliese Quoted on How SEC Extension Leaves Programs Undefined

In The News |

Partner Dom Pugliese was quoted on the latest Securities and Exchange Commission (SEC) interim rule that gives fund companies a six-month compliance extension on certain elements of the SEC’s liquidity risk management program rule. Though the interim rule provides an extension for certain elements of the program until June 1, 2019, a fund company is still required to have a liquidity risk management program in place by the original December 1, 2018, compliance date and the Board must still approve a program administrator by the original deadline.

Dom said that because key elements of the original program have now been delayed until June 1, 2019, such as the bucketing system and the obligation to designate highly liquid investment minimums for funds, the elements of that liquidity program that are required to be in place by December 1, 2018, are very undefined.

He added that there are two possibilities for the makeup of the programs prior to the June 1 deadline: to document the liquidity risk management measures most firms already have in place, or to adopt some classification system, but without the specificity of the bucketing that the agency will require as of the extended deadline.

"Every fund, I have to believe, already has liquidity as part of the investment analysis. Is that enough? Or does the SEC expect there to be a more defined program during this interim period? It simply is not clear,” Dom said.

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