NEW LIQUIDITY MANAGEMENT TOOLS REQUIREMENTS FOR UCITS AND OPEN ENDED AIFS COMING INTO EFFECT ON 16 APRIL 2026: DOES THE SCOPE OF LMTs EXTEND TO NON-EU OPEN ENDED AIFs?

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The AIFMD II (Directive (EU) 2024/927), which will enter into effect on 16 April 2026 imposes a requirement on EU open ended alternative investment funds (EU AIFs) and UCITS to specify/include in their rules or instruments of incorporation two (2) liquidity management tools (LMTs), which are defined in the Annex V of the AIMFD II. The AIFMD II is silent when it comes of the requirement of LMTs for non-EU open-ended AIFs such as Cayman Islands domiciled open-ended unit trusts. Can the ESMA provide clarifications on whether the requirement to choose two (2) liquidity management tools (LMTs) for open-ended EU AIFs apply also to non-EU open ended AIFs managed by an EU AIFM, even if those non-EU AIFs are not marketed in the Union?

European Securities and Markets Authority · Accepted Answer

Dear Mr Biguma, According to Article 2 of the AIFMD, the AIFMD applies to: (a) EU AIFMs which manage one or more AIFs irrespective of whether such AIFs are EU AIFs or non-EU AIFs;  (b) non-EU AIFMs which manage one or more EU AIFs; and (c) non-EU AIFMs which market one or more AIFs in the Union irrespective of whether such AIFs are EU AIFs or non-EU AIFs. Therefore, following letter a), the AIFMD applies also to EU AIFMs that manage non-EU AIFs. This means that the obligation to select at least two LMTs also applies to EU AIFMs that manage non-EU AIFs, as these AIFMs are subject to the AIFMD.  We draw your attention to the fact that Article 16(2b) refers to 'AIFs' and not to 'EU AIFs'. Thank you, ESMA

NEW LIQUIDITY MANAGEMENT TOOLS REQUIREMENTS FOR UCITS AND OPEN ENDED AIFS COMING INTO EFFECT ON 16 APRIL 2026: DOES THE SCOPE OF LMTs EXTEND TO NON-EU OPEN ENDED AIFs?

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