Overview: 

In the EU, in 2017 the ESRB made a series of leverage recommendations suggesting the operationalisation of AIFMD Article 25 to address leverage risks​.

In December 2019, IOSCO published a two-step framework designed to facilitate monitoring of leverage in investment funds that could potentially pose risks to financial stability​

In December 2020, ESMA finalised its Guidelines on Article 25 of the AIFMD​. ESMA does not follow IOSCO recommendations on supervising and assessing the risks related to the use of leverage​. The Guidelines may however be revisited if reporting requirements are changed as part of AIFMD review​ as we anticipate that the review could include changes to calculation of gross method and changes to manner of reporting ​

(Last updated: 2 September 2022)