SBAI » Financial Stability

Bringing managers and investors together to set standards for the alternative investment industry

Financial Stability

The SBAI takes into account the issues of financial stability (alongside investor protection and market integrity) when updating the Standards. In 2008, the Hedge Fund Working Group Final Report (which established the SBAI) highlighted the broader issues in relation to financial stability that needed to be better understood, including handling of situations of liquidity distress (the unwinding of concentrated positions). For example, the SBAI addressed handling of redemptions in situations of liquidity distress in a dedicated consultation to amend the Standards in 2009/2010 (CP1). The SBAI also actively engages in the global policy debate to help advance the thinking about how systemic risk concerns can be better understood and addressed.

SBAI Standards and tools address liquidity risk in alternative funds following regulatory concerns raised by ESMA about Liquidity Risk Management practices in UCITs. Please click here to read the memo.


European Commission European Commission’s Green Paper on Shadow Banking (03/2012)

European Securities and Markets Authority (ESMA) ESMA publishes the feedback on the leverage consultation

ESMA consults on guidance to address leverage risk in the AIF sector

Financial Stability Board (FSB) Financial Stability Board’s Consultative Document on Proposed Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities (06/2016)

Financial Stability Board’s Consultative Document on Assessment Methodology for Identifying NBNI G-SIFIs Strengthening Oversight and Regulation of Shadow Banking (01/2014)

Financial Stability Board’s Consultative Document on Strengthening Oversight and Regulation of Shadow Banking (11/2012)

International Organization of Securities Commissions (IOSCO) IOSCO’s Report “CR08/2018: Leverage” outlines a proposed framework that could facilitate regulators calculating and analysing leverage in funds over time (11/2018)

UK Financial Conduct Authority (FCA) FSA* Consultation: A regulatory response to the global banking crisis (06/2009)

UK Treasury UK Treasury Inquiry into Proposals for European Macro and Micro Prudential Financial Regulation (11/2009)

UK Treasury Committee call for evidence on the Banking Crisis (01/2009)

*FSA is now Financial Conduct Authority