Service Investment Services 88% Fixed Income 75%
Specialism Liquidity 89% Prudential Standards 87%
2026-03-13 08:49:47 · adavies@vixio.com
ID
2961369
GUID
cc7b297301ea01f98ed04f19bba5429d

Classification

Service
Investment Services (88%)

The update directly addresses liquidity management tools for open-ended investment funds (OICVM and AIF), which are collective investment vehicles managed by investment firms to help clients manage assets through pooled investment strategies.

Fixed Income (75%)

Fixed Income is a secondary consideration because the guidelines address liquidity management across fund types, and many open-ended funds hold fixed income assets; however, the guidance is asset-class agnostic and applies broadly to all fund structures.

Specialism
Liquidity (89%)

The update establishes mandatory guidelines for fund managers on liquidity management tool selection and calibration, which directly addresses prudential liquidity risk management obligations for investment funds.

Prudential Standards (87%)

Mandatory inheritance: Liquidity is a child of Prudential Standards, so Prudential Standards must be raised as the secondary tag.

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Stored 08:49:46
TITLE: European Securities and Markets Authority Issues Guidance on Liquidity Management Tools for Open-Ended Investment Funds BODY: On 12 March 2026, the European Securities and Markets Authority (ESMA) published guidelines on liquidity management tools (LMT) for undertakings for collective investment in transferable securities (OICVM) and alternative investment funds (AIF) of open-ended type. The guidelines implement mandates established under Directive (EU) 2024/927, which amended the OICVM Directive (2009/65/CE) and the Alternative Investment Fund Managers Directive (2011/61/UE). The guidelines establish consistent supervisory practices for the selection, calibration, activation and deactivation of liquidity management tools to address liquidity risk and mitigate financial stability risks. Fund managers retain primary responsibility for liquidity risk management and must select appropriate tools considering fund structure, investment strategy, trading conditions, underlying asset liquidity, stress test results, investor base characteristics and operational feasibility. ESMA requires fund managers to select at least two suitable LMT from specified categories, which include quantitative-based tools (redemption restrictions, notice period extensions, redemption suspensions) and anti-dilution tools (redemption fees, swing pricing, dual pricing, anti-dilution levies). Guidelines address specific tool applications: suspensions should activate only in exceptional circumstances; redemption restrictions suit concentrated investor bases and illiquid assets; notice period extensions require careful calibration to avoid triggering additional redemptions; anti-dilution tools should reflect estimated liquidity costs; and side pockets should activate only in exceptional circumstances involving significant valuation uncertainty or illiquidity. Competent authorities must notify ESMA within two months of publication whether they comply with the guidelines or provide reasons for non-compliance. The guidelines apply from the effective date of the underlying technical regulatory standards, with a twelve-month transition period for existing funds.
  • Scraped:2026-03-13 08:49:47
  • Created:2026-03-13 08:49:46
  • By:adavies@vixio.com (41)