Introduction
On 8 July 2024, ESMA published two separate consultation papers
relating to the use of liquidity management tools (LMTs) by
UCITS
funds and open-ended AIFs, namely:
1. draft regulatory technical standards on the characteristics
of LMTs (Draft RTS); and
2. draft guidelines on the selection and calibration of LMTs
(Draft Guidelines).
In this briefing, we highlight key elements of ESMA's
proposals which we encourage all Irish fund management companies
and their relevant delegates to consider.
Feedback to the consultation should be provided to ESMA before
the deadline of 8 October 2024.
Background
One of the key reforms to the UCITS and AIFMD frameworks made by
the recently published Directive (EU) 2024/927 (Omnibus Directive)
is the introduction of the mandatory use of at least two LMTs by
all UCITS funds and open-ended AIFs1. This
obligation will apply to in-scope fund management companies from 16
April 2026.
