Nomura Research Institute to offer new liquidity risk monitoring service

Nomura Research Institute, Ltd. (NRI) today announces that it will provide an optional liquidity risk monitoring service on T-STAR/GX in response to the recent “Amendment to Risk Management Regulations of Publicly Offered Investment Trusts” set by Japan’s Investment Trust Association (“JITA”). NRI’s new service will enable clients to comply with the current regulations governing liquidity risk management of publicly offered investment trusts.

The Service is optional on NRI’s T-STAR/GX multi-user service, already in use by a majority of Japanese asset managers, and leverages MSCI Inc. (NYSE: MSCI)’s LiquidityMetrics liquidity risk calculation model, By utilizing NRI’s new service, asset managers using T-STAR/GX are able to calculate and assess liquidity risk efficiently while minimizing the additional cost for regulatory compliance.

Interest in liquidity risk management, now common in the United States and other countries on growing regulatory demand, has also increased recently among asset managers in Japan. On top of this, the Financial Services Agency and the JITA established the “Amendment to Risk Management Regulations of Publicly Offered Investment Trusts”, which are scheduled to go into effect from January 2022.

The tighter regulatory environment naturally increases the burden on asset managers. NRI provides the service with the aim of responding to new regulations while reducing asset managers’ operational burden to the extent possible.

The new service significantly reduces the burden of data registration by using existing T-STAR/GX management data. It also lowers the operational burden through NRI’s strong support. The service leverages MSCI’s wealth of experience in the risk-management field. It automatically links T-STAR/GX data to MSCI’s LiquidityMetrics to calculate fund liquidity risk such as that created by holding stocks and bonds in the portfolio.

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