AIFMD II – Liquidity Management Tools For Open-Ended AIFs

In its review of Directive 2011/61/EU (AIFMD), the EU Commission concluded that there is a need to facilitate the use of liquidity management tools (LMTs) across the Union. The recently adopted AIFMD II includes new requirements for open-ended AIFs, to notably enable dealing with redemption pressures under stressed market conditions.

Directive 2024/927/EU (AIFMD II) entered into force on 15 April 2024 with a two-year implementation period for EU Member States to transpose the new provisions into their respective national laws. AIFMD II notably provides for additional liquidity management requirements, the primary responsibility for which will remain with AIFMs, alongside the selection, calibration, activation and deactivation of LMTs. This will impact the governance framework for AIFMs, as they will need to set out the foregoing in a LMT policy, to supplement their existing liquidity risk management procedures.