New European Rules for Liquidity Management

AIFMD II entered into force on 15 April 2024 and introduces changes to both the AIFMD and the UCITS Directive. Member States have until 16 April 2026 to transpose these into national law, after which AIFMs and UCITS management companies must comply with the new legislation.
In this AIFMD II update on liquidity management tools (LMTs), the AFM discusses the new requirements around LMTs. LMTs are instruments used to manage a fund’s liquidity risk. The new provisions are intended to make funds more resilient against market stress situations and to minimise divergent national practices on the use of LMTs.

Fund managers of open-ended AIFs and UCITS must select at least two relevant LMTs

The revised AIFMD and UCITS Directive require fund managers of open‑ended AIFs and UCITS to select at least two relevant LMTs for each fund they manage. For a money market fund (MMF), one LMT may suffice. The selection must be made from the prescribed list set out in the annexes to the revised directives. In determining the appropriate LMTs, fund managers should consider, amongst other things, the investment strategy, the nature and characteristics of the underlying assets, and the fund’s redemption policy.

The LMTs must be included in the offering documentation and the fund rules or the instruments of incorporation

The selected LMTs must be specified in the offering documentation as well as in the fund rules or instruments of incorporation, to enable their possible use in the interest of investors and to ensure adequate transparency.

Detailed policies and procedures governing the use of LMTs are mandatory

Furthermore, for the selected LMTs, fund managers must establish appropriate policies setting out the conditions for their selection, activation, deactivation and calibration, which form an integral part of the broader liquidity risk management framework.

Adjusted notification procedure for LMT‑related notifications as of 18 March 2026

Fund managers must notify the AFM of the selected LMTs as well as provide the corresponding detailed policies and procedures. Finally, fund managers are required to inform the AFM when LMTs are activated or deactivated. As of 18 March 2026, an adjusted notification procedure is available for LMT‑related notifications. These notifications must be made through the AFM Portal .
For existing funds where no material changes are made to the prospectus and/or the relevant policy framework (for example, because they have already complied with the requirements under AIFMD II), the AFM expects to collect information on the LMTs chosen at a later stage.

The new rules require timely preparation, updating of documentation and possible adjustments to internal processes. By taking action as soon as possible, fund managers ensure compliance with the European requirements and strengthen the resilience of their funds.

More information

AIFMD II Update (pdf, 60 kB)