Esma's proposed AIF segregation will destroy liquidity
Prime brokers and custodians currently holding assets in omnibus accounts will be hardest hit by proposed segregation guidelines impacting third-party delegates of alternative investment funds
As the deadline for the European Securities and Markets Authority (Esma) to finalise asset segregation rules pertaining to third-party delegates of alternative investment funds (AIFs) approaches, industry participants warn the move jeopardises the future of tri-party collateral management.
They say proposed alternative investment fund managers directive (AIFMD) asset segregation guidelines will destroy liquidity in Europe, making tri-party collateral management "impossible".
In a December 2014
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