New guidance for asset managers aims to protect investors when a firm decides to wind up an investment fund.

The International Organization of Securities Commissions (IOSCO) on Thursday published a report hat sets out good practices for firms when they voluntarily terminate investment funds.

“The decision to terminate an investment fund can have a significant impact on investors, including their ability to withdraw their funds in a timely manner,” IOSCO says in its announcement about the report’s release.

The report covers areas such as disclosure, the decision to terminate or merge funds, and practices to follow during the termination process. It also sets out additional good practices that would apply with illiquid, or hard-to-value securities, such as commodity funds, real estate funds or hedge funds.

“Investment funds terminate for many different reasons, including weak investor demand, unfavourable economic conditions or commercial decisions by the entity responsible for the overall operation of the investment fund to restructure. In some cases, funds may also need to terminate if significant redemptions make them no longer viable,” the report says.