Key takeaways
- This second instalment of our AIFMD II 101 series focuses on the new EU-wide legal framework for liquidity management tools ("LMTs") under AIFMD II.
- The new rules in relation to the use of LMTs will apply to alternative investment fund managers ("AIFMs") of open-ended alternative investment funds ("AIFs") and undertakings for collective investment in transferable securities ("UCITS").
- ESMA has also proposed detailed technical standards governing the characteristics of each of the LMTs listed in AIFMD II, as well as guidelines on the selection, calibration and activation/deactivation of such LMTs.
On 15 April 2024, Directive 2024/927/EU amending AIFMD (2011/61/EU) and the UCITS Directive (2009/65/EC), as regards delegation arrangements, liquidity risk management, supervisory reporting, the provision of depositary and custody services and loan origination by alternative investment funds ("AIFMD II") entered into force. The entry into force of AIFMD II marks a significant milestone for the European asset management industry.
Our advisory series considers a number of key changes for the asset management industry introduced by AIFMD II. The first part of our advisory series focused on the key changes for managers pursuing loan origination strategies, in light of the new harmonised framework for loan originating activities across the European Union ("EU").
In the second part of our AIFMD II advisory series we focus on the new legal framework under AIFMD II in relation to the use of liquidity management tools ("LMTs"). The new rules on LMTs apply to undertakings for collective investment in transferable securities ("UCITS") and to authorised EU alternative investment fund managers ("AIFMs") of open-ended alternative investment funds ("AIFs"). As such, all UCITS, open-ended AIFs, UCITS management companies and AIFMs will need to pay specific attention to the relevant requirements.
Please also refer to our other recent AIFMD II publications AIFMD II – A closer look and AIFMD II: Timeline to Implementation.
In this advisory we provide an overview of the new LMT requirements and their practical implications for both open-ended AIFs and UCITS funds and their fund management companies.
Read the full advisory in the second part of our series here.
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.
