ESMA solicits feedback on liquidity management guidelines for AIFMD and UCITS

Coin World report:
The European Securities and Markets Authority (ESMA) is seeking feedback on draft guidelines and technical standards. These are related to the revised Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for Collective Investment in Transferable Securities Directive (UCITS).
Both directives aim to reduce financial stability risks and promote uniform liquidity risk management in the investment fund sector.
LMT Calibration Guidelines
The draft regulatory technical standards define the characteristics of liquidity management tools. This includes calculation methodologies and activation mechanisms. ESMA has also published draft LMT guidelines for UCITS and open-ended AIFs.
These guidelines provide managers with instructions on how to select and calibrate LMTs. This selection should take into consideration their investment strategies, liquidity profiles, and redemption policies.
“The revised AIFMD and UCITS directives introduce long-awaited provisions on the availability and use of liquidity management tools,” said Verena Ross, Chair of ESMA. “This semester, consultations are taking place on how to apply these provisions in practice.”
“These proposed new rules align with the latest global standards provided by the FSB and IOSCO, and will contribute to strengthening the EU’s regulatory framework for investment funds.”
Earlier, ESMA released a second report on the regulation of crypto-assets markets, which detailed eight draft technical standards as reported by Finance Magnates. These measures aim to enhance transparency for retail investors and clarify disclosure and record-keeping requirements for providers. The standards also introduce data protocols to assist national regulators in their supervision efforts.