Managers of loan mutual funds are preparing for the release of final rules from the SEC that seek to improve the liquidity risk management of mutual funds and ETF. Under the proposal, funds would be required to include a liquidity classification of the portfolio based on the time needed for an asset to be converted to cash, a review of the fund's liquidity risk and establish a three-day liquid asset minimum, requiring a set percentage of assets be held in cash or invested in holdings that can be converted to cash within three business days. It is unclear what the final requirements of the rule will be.
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