Service Investment Services 88% Fixed Income 70%
Specialism Liquidity 89% Prudential Standards 87%
2026-03-13 08:49:26 · adavies@vixio.com
ID
2961377
GUID
4fed56b5ac0c01dbe9fb0a0ace707712

Classification

Service
Investment Services (88%)

The update establishes supervisory guidance for liquidity management tools used by UCITS and AIFs, which are collective investment undertakings managing pooled assets for investors—a core Investment Services function.

Fixed Income (70%)

Fixed Income is secondary because many of the liquidity management tools (redemption restrictions, notice periods, swing pricing) are commonly applied to funds holding illiquid fixed income assets, though the guidance applies broadly across asset classes.

Specialism
Liquidity (89%)

The update establishes supervisory guidance on liquidity management tools and their calibration for collective investment funds, which directly addresses liquidity risk management and regulatory requirements for fund managers.

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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TITLE: European Securities and Markets Authority Issues Liquidity Management Tools Guidance for Collective Investment Undertakings and Alternative Investment Funds BODY: On 12 March 2026, the European Securities and Markets Authority (ESMA) published guidelines on liquidity management tools for undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs) of open-type structure. The guidelines establish consistent supervisory practices for the selection, calibration, and activation of liquidity management tools across European Union member states. The guidelines apply to competent authorities and fund managers under Article 18a(2) of the UCITS Directive (2009/65/ES) and Articles 16(2b) and 16(2c) of the Alternative Investment Fund Managers Directive (2011/61/EU), as amended by Directive (EU) 2024/927. They take effect from the date of application of the related regulatory technical standards, with a 12-month transition period for funds existing prior to that date. Fund managers remain primarily responsible for managing liquidity risk and selecting appropriate tools. The guidelines require managers to select at least two suitable liquidity management tools from prescribed lists, considering factors including fund structure, investment strategy, operating conditions, liquidity profile, stress test results, investor base characteristics, and distribution policies. Managers may select quantitative tools (redemption restrictions, notice period extensions) and anti-dilution tools (redemption fees, swing pricing, dual pricing, anti-dilution fees), or additional measures beyond the minimum two tools. The guidelines address specific tool applications: suspension of subscriptions and redemptions only in exceptional circumstances; redemption restrictions for concentrated investor bases and illiquid assets; notice period extensions particularly for funds investing in less liquid assets; in-kind redemptions for professional investors; and anti-dilution fees for funds with high investor concentration or significant subscription and redemption flows. Side pockets may be activated only in exceptional circumstances involving valuation uncertainty or specific sector crises. Competent authorities must notify ESMA within two months of publication whether they comply with these guidelines or provide reasons for non-compliance. Financial market participants are not required to report compliance. REFERENCES: European Securities and Markets Authority. (2026, March 12). Guidelines on liquidity management tools for UCITS and open-ended AIF. ESMA34-671404336-1364. Retrieved from www.esma.europa.eu
  • Scraped:2026-03-13 08:49:26
  • Created:2026-03-13 08:49:25
  • By:adavies@vixio.com (41)