Austria Publishes Ministerial Draft Regarding AIFMD II Implementation. A New Loan Origination Framework For Funds Is Introduced.

January 2026  – Directive (EU) 2024/927, commonly referred to as AIFMD II, marks the most significant reform of the Alternative Investment Fund Managers Directive (AIFMD) since its original adoption in 2011. Member States are required to transpose AIFMD II into national law by 16 April 2026.

On 22 January 2026, the Austrian Federal Ministry of Finance has published a ministerial draft regarding the implementation of AIFMD II by amending the Austrian Alternative Investment Fund Managers Act (Alternative Investmentfonds Manager-Gesetz, AIFMG).

The key objectives are a stronger liquidity risk management, a harmonised EU legal framework for loan originating funds, greater transparency and reporting obligations, as well as stricter requirements for delegation.

Focus on Loan Origination by Alternative Investment Funds

AIFMD II introduces a harmonised regime governing loan origination by Alternative Investment Funds (AIFs). This includes a definition of “loan origination” that encompasses both direct lending and lending via special purpose vehicles where the AIF or AIFM structures or pre‑agrees loan terms. The focus is, accordingly, on instances where the AIF is the originator (directly or indirectly) of the loan or involved in setting the terms of the loan in which the AIF subsequently invests.

The proposed amendments to the AIFMG recognize the right of AIFs to grant loans and establish common rules for lending. The European legislator acknowledges that this is a critical source of financing particularly for SMEs that find traditional lending sources difficult to access. Lending by AIFs is therefore now officially approved as an alternative source of financing for the real economy in Austria.

In addition, however, the proposed amendments reflect regulatory concerns about shadow banking and seek to align alternative credit funds more closely with prudential norms traditionally associated with the banking sector.

Essential elements of the new lending regime:

• AIFMD II and the amended AIFMG introduce a clear policy preference for closed‑ended structures for loan‑originating AIFs. Open‑ended loan‑originating funds are permitted only where the AIFM can demonstrate that the fund's liquidity risk management framework is compatible with its redemption policy and investment strategy.
• Lending to consumers will be prohibited (exertion of a discretion right granted by AIFMD II. This discretion right was also exerted, for example, by the member states Luxembourg and Germany). AIFs are further not allowed to provide credit services to consumers in Austria.
• An AIFM must ensure that where an AIF it manages originates loans, the notional value of the loans originated to any single borrower by that AIF does not exceed, in aggregate, 20% of the capital of the AIF where the borrower is a ‘financial undertaking' or a fund. This limit does not apply for up to the first 24 months of an AIF's life (with some exceptions) and also ceases to apply once the AIFM begins selling assets as part of the liquidation of the AIF. It can also be temporarily suspended, for no longer than is strictly necessary (and for no more than 12 months), during periods where the capital of the AIF is increased or reduced.
• Leverage limits will apply. An AIFM must ensure that the leverage of a loan-originating AIF does not represent more than 175% for open-ended AIFs and 300% for closed-ended AIFs. This excludes borrowing arrangements which are fully covered by contractual capital commitments from investors. The leverage limits further do not apply to a loan-originating AIF whose lending activities consist solely of originating shareholder loans, provided that the notional value of those loans does not exceed in aggregate 150% of the capital of the AIF.
• An AIF may not grant loans to its AIFM or the AIFM's staff; its depositary or its delegates; an entity to which its AIFM has delegated functions or the staff of that entity; or an entity within the same group as the AIFM unless that entity is a financial undertaking that exclusively finances borrowers that are not any of the foregoing.
• AIFMs must implement effective policies, procedures and processes for the granting of loans and for all loan originating activities (even if an AIF does not meet the definition of a loan-originating AIF).
• Where AIFMs manage AIFs that engage in loan origination, including when those AIFs gain exposure to loans through third parties, they must also implement effective policies, procedures and processes for assessing the credit risk and for administering and monitoring credit portfolios. These requirements do not apply to the origination of shareholder loans, where the notional value of such loans does not exceed in aggregate 150% of the capital of the AIF.
• AIFMs are prohibited from managing AIFs whose investment strategy, or part of it, is to originate loans with the sole purpose of transferring those loans or exposures to third parties (''originate-to-distribute'' strategy). This is regardless of whether those AIFs meet the definition of loan-originating AIFs.
• A 5% risk retention requirement where originated loans are subsequently sold to third parties. AIFMs must ensure that an AIF retains 5% of the notional value of each loan that the AIF has originated and sold off until maturity for all loans whose maturity is up to eight years, and for at least eight years for other loans. This does not apply where the AIFM begins selling assets to redeem units or shares as part of the liquidation of an AIF, if the disposal is necessary for compliance with sanctions or product requirements, to implement the strategy of the AIF in the best interests of investor, or if the sale is due to a deterioration in the risk associated with the loan.
• Existing AIFs (before 15.4.2024) enjoy certain grandfathering rights until 16.4.2029. This means that AIFMs managing AIFs that originate loans that were constituted before 15 April 2024 will be deemed, for five years (until 16 April 2029), to comply with the provisions regarding the 20% concentration limit, the leverage limits and the requirement to be, in principle, closed-ended.

Introduction of a harmonised liquidity management tools framework

AIFMD II fundamentally reshapes the treatment of liquidity management tools (LMTs) for open‑ended AIFs. Whereas AIFMD I merely required AIFMs to implement “appropriate” liquidity risk management systems, the revised framework mandates that all open‑ended AIFs select at least two LMT from a harmonised list in a new Annex V to the AIFMG including swing pricing, redemption gates, notice period extensions and side pockets.

The selected LMTs need to be included in the AIF's rules or instruments of incorporation. AIFMs must implement detailed policies and procedures for the activation and deactivation of any selected LMT, and the operational and administrative arrangements for the use of such tool. AIFMs further need to inform the Austrian Financial Market Authority (FMA) of the chosen LMTs for each relevant AIF as well as the details of their policies and procedures.

Strengthening the rules governing substance and delegation of AIFMs

Delegation has long been a politically sensitive issue within the AIFMD framework. AIFMD II stops short of imposing quantitative delegation limits but significantly enhances transparency and supervisory oversight, particularly in relation to third‑country delegates.

AIFMs must provide more granular information at authorisation and on an ongoing basis regarding the identity, location and supervisor of delegates, the functions delegated, the extent of delegation and he resources retained by the AIFM to supervise delegates effectively.

ESMA is tasked with maintaining a centralised delegation database, enabling EU‑wide monitoring of delegation trends and facilitating coordinated supervisory responses where risks are identified

Initial assessment

AIFMD II and the forthcoming amendments to the AIFMG mark a significant regulatory shift for Austrian AIFMs. The updated framework raises the bar across governance, reporting, liquidity management and loan-origination activities, introducing noticeably stricter organisational substance and authorisation requirements that will translate into more demanding licensing expectations under the AIFMG.

While the direction of travel is clear, several key points still await clarification—either through ESMA's regulatory technical standards or guidance from the FMA, meaning important details of the regime are still evolving.

What is already certain, however, is that Austrian AIFMs will need to enhance governance frameworks, rethink loan-fund structures, embed robust liquidity tools, and brace for heightened supervisory scrutiny. Each in-scope AIF and any new product concepts will require a careful impact assessment. Strengthened internal governance, risk management, and operational requirements will necessitate updates to policies, processes, and organisational setup

As a law firm, we are ready to support you - whether through an initial impact assessment, gap analysis, implementation roadmap, or targeted advice on governance, delegation, liquidity tools, or loan- origination requirements. If you would like to discuss how AIFMD II affects your organisation, we are here to help.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.