ESMA Publishes Amended Guidelines On Liquidity Management Tools

On 18 December 2025, the European Securities and Markets Authority ("ESMA") published its Report on amended guidelines on liquidity management tools of UCITS and open-ended AIFs (the "Guidelines"). The purpose behind the amendments to the Guidelines, originally published in April 2025, is to align the Guidelines with two specific areas of the regulatory technical standards (the "RTS") on liquidity management tools ("LMTs") under the revised AIFMD and UCITS Directive, as adopted by the European Commission in November 2025.

The amendments relate to the following:

1. Investor-level redemption gates

In the RTS under AIFMD, Recital 3 and Article 2 each envisage the imposition of "investor-level" redemption gates. The Guidelines have now been amended by inserting a new paragraph 27a which provides that fund managers of open-ended AIFs with no retail investors and with a limited number of professional investors should consider investor-level redemption gates, alone