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ARTICLE · 26 JULY 2024

AIFMD II: ESMA Launches Two Consultations On Liquidity Management Tools

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The current environment of global uncertainty, marked by significant events such as armed conflicts and drastic changes in interest rates, has considerably amplified the importance...

LuxembourgFinance and Banking
Aurélien Hollard
Aurélien Hollard
Benjamin Bada
Benjamin Bada
Julia Bruzzese
Julia Bruzzese
Julien Robert
Julien Robert
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I. Background

The current environment of global uncertainty, marked by significant events such as armed conflicts and drastic changes in interest rates, has considerably amplified the importance of liquidity management in the fund sector, largely due to concerns over potential liquidity mismatch between a fund's illiquid investments and its investors' redemption rights.

Under the reform of the alternative investment fund managers directive (AIFMD) and undertakings for collective investment in transferable securities directive (UCITSD), the European Securities and Markets Authority (ESMA) was mandated to namely (i) draft regulatory technical standards (RTS) to determine the characteristics of the liquidity managements tools set out in Annex V of AIMFD and Annex IIA of UCITSD, and (ii) develop guidelines (the Guidelines) on the selection and calibration of liquidity management tools by alternative investment fund managers (AIFMs) or UCITS management companies (UCI

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