meta_id 3381810

On August 6, 2026, the Cyprus Securities and Exchange Commission (CySEC) issued Circular No. C793 to Cyprus Investment Fund Managers (CyIFMs), including UCITS management companies, self-managed UCITS, alternative investment fund managers, and self-managed AIFs, regarding revised liquidity risk management requirements. The circular addresses significant amendments introduced by Directive (EU) 2024/927, which amended Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD) and Directive 2009/65/EC on UCITS. These amendments strengthen the existing framework and introduce harmonised requirements regarding the availability, selection, calibration, activation and use of liquidity management tools (LMTs) by UCITS and open-ended AIFs. CySEC also drew attention to the European Securities and Markets Authority (ESMA) Guidelines on liquidity management tools and Regulatory Technical Standards (RTSs) specifying LMT characteristics. The RTSs, comprising Delegated Regulations (EU) 2026/465 and (EU) 2026/466, are binding and directly applicable across all member states. Key amendments include greater flexibility for calibration and activation of redemption gates, express incorporation of investor-level redemption gates within the AIFMD framework, clarification on combining investor-level and fund-level redemption gates, and refined requirements for anti-dilution tools. The RTSs became effective on April 16, 2026. CySEC expects CyIFMs and their boards of directors to conduct documented gap analyses of existing liquidity risk management frameworks, policies, procedures, fund documentation, systems and operational arrangements against RTS requirements and ESMA Guidelines. Fund managers must ensure relevant personnel and delegated service providers possess necessary expertise, systems and operational capacity. Boards must exercise effective oversight and ensure LMT selection, calibration, activation and use are suitable for each fund's nature, scale, complexity, investment strategy, liquidity profile and redemption arrangements. UCITS and AIFs established before April 16, 2026, benefit from transitional arrangements until April 16, 2027. CySEC may request evidence of assessments, decisions and implemented measures during supervisory activities.