On 15 April 2025, ESMA published its Final Report on Draft Regulatory Technical Standards (RTS) on Liquidity Management Tools under the AIFMD and UCITS Directive and a Final Report on Guidelines on Liquidity Management Tools (LMTs) of UCITS and open-ended AIFs.
As well as providing the draft RTS under AIFMD and under the UCITS Directive, the Final Report on the draft RTS provides a comprehensive response to the feedback received to the consultation and the resulting amendments made to the draft RTS.
The Guidelines on LMTs have been amended to recognise that responsibility for liquidity risk management and for the selection, activation and calibration of the appropriate LMTs sits solely with the manager.
ESMA took onboard many of the concerns AREF raised in its response to their consultations on the RTS and guidelines (see below).
The European Commission (EC) have 3 months to decide if to adopt the RTS; this may be extended by one month. If the EC amend the draft RTS in a way that impact the Guidelines, ESMA will adjust the Guidelines accordingly. The Guidelines will apply from the date of entry into force of the RTS. Funds existing before the entry into force of the RTS will have 12 months to comply with the Guidelines.
Consultations 2024
ESMA sought input on draft Guidelines and Regulatory Technical Standards (RTS) for liquidity management tools (LMTs) under the revised AIFMD and UCITS Directive over the summer of 2024.
The draft RTS specified the characteristics of the LMTs. ESMA defined the constituting elements of each LMT, such as calculation methodologies and activation mechanisms.
The draft Guidelines provided guidance on how managers should select and calibrate LMTs, in light of their investment strategy, their liquidity profile and the redemption policy of the fund.
AREF liaised with INREV on a response to these consultations and submitted the following responses before 8 October 2024.
Over-arching views regarding the ESMA LMT consultations
Reply form to the consultation on Guidelines for LMTs of UCITS and open-ended AIFs
Reply form to the consultation on RTS for LMTs under the revised AIFMD and UCITS Directive
AREF's Public Policy Committee oversaw AREF's response to the consultations.
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