TITLE: European Securities and Markets Authority Publishes Guidelines on Liquidity Management Tools for UCITS and Open-Ended AIFs
BODY:
The European Securities and Markets Authority (ESMA) has published guidelines on liquidity management tools applicable to Undertakings for Collective Investment in Transferable Securities (UCITS) and open-ended Alternative Investment Funds (AIFs).
The guidelines, referenced as ESMA34-671404336-1364, provide a comprehensive framework for fund managers to implement and manage liquidity management tools effectively. These guidelines apply to UCITS and open-ended AIFs operating within the European Union and are designed to ensure consistent application of liquidity management practices across member states. The guidance addresses how fund managers should utilise various liquidity management tools to manage redemption requests and maintain adequate liquidity levels while protecting investor interests.
The guidelines are particularly significant for fund managers responsible for managing redemptions and ensuring funds can meet investor withdrawal requests in a timely manner. They establish best practices for the use of liquidity management tools and set out expectations for how fund managers should assess and monitor liquidity risks within their portfolios.
ESMA has made the guidelines available in all official EU languages, including English, Bulgarian, Czech, Danish, German, Spanish, Estonian, Finnish, French, Croatian, Hungarian, Italian, Lithuanian, Latvian, Dutch, Polish, Portuguese, Romanian, Slovak, Slovenian, and Swedish. Fund managers should review the guidelines in their applicable language and implement the recommendations in accordance with their regulatory obligations under UCITS and Alternative Investment Fund Manager (AIFM) regulations.
**Reference:**
ESMA34-671404336-1364 Guidelines on Liquidity Management Tools of UCITS and Open-Ended AIFs