UK Lays Out LDI Fund Reforms After Last Year’s Market Mayhem

Asset managers offering LDI strategies to pension funds must ensure their clients can deliver collateral within five days, Britain’s financial services watchdog said as part of a series of reforms following the market mayhem caused by September’s mini-budget.

The Financial Conduct Authority said in a statement Monday that it saw significant deficiencies in the risk management of so-called liability-driven investment strategies, whose meltdown threatened financial stability last year. They included areas such as stress testing and scenario planning as well as communications and client services.

The regulator said that it now expects all firm to manage their products and services ...