ESMA welcomes NCAs’ work to maintain resilience of liability driven investment funds

On 30 November 2022, The European Securities and Markets Authority (ESMA), welcomed the initiative of two National Competent Authorities’ (NCAs) in relation to Liability Driven Investment Funds (LDI Funds).  The Central Bank of Ireland (CBI), and the Commission de Surveillance du Secteur Financier (CSSF) published letters addressed to LDI fund managers asking them to maintain the current level of resilience and the reduced risk profile of GBP LDI funds. According to these letters, managers wanting to reduce GBP LDI Fund’s yield buffers below the current levels shall inform their NCA in advance and provide a justification.