Regulatory reform
Liquidity risk management proposed changes
Published on: March 27, 2026
Provided in: EN
Submission – CSA – Proposed Amendments NI 81-102 and Consultation Paper Liquidity Risk Management for Investment Funds
Recipients
- Canadian Securities Administrators (CSA)
Industry segments this resource supports
- Assets management
Summary
Our submission responds to the CSA’s proposed amendments to National Instrument 81 -102 and related companion policy changes, along with a consultation paper on liquidity risk management (LRM) tools, liquidity classification, and regulatory disclosure. The submission supports the CSA’s goal of strengthening liquidity oversight but urges a principles based, flexible framework that reflects the Canadian fund landscape and avoids unnecessary regulatory burden. We provide detailed feedback on operational requirements, liquidity classification, stress testing, pre trade assessments, and implementation timelines.
Why this matters: Liquidity risk management rules directly affect how investment funds protect investors and maintain market stability.
Key takeaways
- SIMA supports the CSA’s initiative to enhance liquidity risk management for investment funds and align with international standards.
- A principles based approach is recommended to allow investment fund managers to apply professional judgment and tailor LRM programs to each fund’s liquidity profile.
- SIMA emphasizes regulatory burden reduction, noting that reporting issuers in Canada have not historically experienced liquidity issues.
- SIMA recommends excluding non reporting issuers and ETFs from the proposed framework, as ETF liquidity is primarily driven by secondary market mechanisms.
- The submission calls for a minimum 12 month implementation period, or longer if pre trade liquidity assessments remain part of the final rule.
- SIMA strongly opposes mandatory pre trade liquidity assessments, citing operational impracticality and potential harm to best execution practices.
- Stress testing should remain flexible, with firms determining appropriate frequency rather than adhering to a prescriptive quarterly requirement.
- SIMA does not support the proposed illiquid asset definition, arguing it introduces unnecessary complexity and may distort liquidity classification.
- The news release reinforces SIMA’s call for regulatory efficiency and highlights the importance of balancing investor protection with operational practicality.
