ARTICLE · 07 MAY 2025

ESMA Releases Updated Draft Rules On Liquidity Management For AIFMD And UCITS

Arthur Cox

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Changes to the AIFMD and UCITS Directive which introduce a harmonised framework for the use of liquidity management tools ("LMTs") must be implemented into EU member state law by 16 April 2026.

IrelandFinance and Banking

Dara Harrington

Stephanie Hanrahan

Christopher O'Reilly

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Background

Changes to the AIFMD and UCITS Directive which introduce a harmonised framework for the use of liquidity management tools ("LMTs") must be implemented into EU member state law by 16 April 2026.

The European Securities and Markets Authority ("ESMA") recently consulted on a framework for the use of LMTs by AIFMs managing open-ended alternative investment funds ("AIFs") and by management companies of UCITS (each a "manager"). On 15 April 2025, ESMA published final guidelines on the selection and calibration of LMTs (the "Guidelines") and updated draft regulatory technical standards ("RTS") to determine the characteristics of the LMTs. We have summarised below some of the key differences between the initial draft Guidelines and RTS published as part of the consultation and the proposed final versions of those documents.

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This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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