On May 22, 2024, the European Commission (EC) launched a consultation to assess the appropriateness of macroprudential policies for Non-Bank Financial Intermediation (NBFI). From DUFAS, we have prepared a memorandum. This provides a brief overview of our views, insights and recommendations regarding this consultation.
Dual regulation
At DUFAS, we recommend a comprehensive analytical approach for identifying systemic risks related to NBFI. This approach should include all market participants, with priority given to unregulated entities to avoid double regulation of asset managers already covered by AIFMD and UCITS. A balanced approach helps assess systemic risk without undue regulatory burden.
Liquidity requirements
In addition, we address liquidity risk in this memorandum highlighting that current regulatory frameworks such as the AIFMD and UCITSD contain recently updated rules regarding risk management and liquidity management for asset managers. We recommend flexible liquidity management tailored to the specific risk profiles of market participants.
Finally, the memorandum discusses the role of prudential regulators in enhanced market surveillance and the application of system-wide stress tests.
