On the 18th March, 2026, the CSSF issued a communication to the investment fund industry (the “Communication”) following the introduction of the Law of 3 March 2026 (the “2026 Law”), which transposed Directive (EU) 20204/927 of the European Parliament and of the Council of 13 March 2024 amending Directives 2011/61/EU and 2009/65/EU (“AIFMD II/UCITS VI”).
The Communication highlights that following the transposition of AIFMD II/UCITS IV, with effect from the 16th April, 2025, additional liquidity management requirements have been introduced with respect to Luxembourg domiciled UCITS, their Management Companies, and Luxembourg authorized AIFMs that manage opened-ended AIFs (“Market Participants”).
Market Participants are required to select at least two liquidity management tools (“LMTs”) from those referred to in Annex III, points 2 to 8 of the Law of 17 December 2010 relating to UCIs (the “2010 Law”), as amended by the 2026 Law or Annex V, points 2 to 8 of the Law of 12 July 2013 on AIFMs (the “2013 Law”), as amended by the 2026 Law, as applicable. The selection shall be made after an assessment on the suitability of those LMTs in relation to the pursued investment strategy, the liquidity profile and the redemption policy of the UCITS or AIF.
The selection of LMTs is to be duly disclosed in the UCITS/AIF’s instrument of incorporation or fund rules and must be reflected in the UCITS prospectus or as part of the information provided under Article 21 of the 2013 Law for AIFs. Furthermore, the Market Participants (as applicable) shall also implement detailed policies and procedures for the activation and deactivation of any selected LMT and the operational and administrative arrangements for the use of such tool.
The selection of LMTs along with the detailed policies and procedures governing their activation and deactivation are to be communicated to the CSSF. Furthermore, information on actual activations or deactivations of LMTs is to be provided to the CSSF in accordance with the provisions of the 2010 and 2013 Laws.
In this respect, market participants are to duly notify the CSSF of the selected LMTs by the 16th April, 2026. After the initial communication, market participants are to ensure that such information is kept up to date. After the 16th April, 2026, market participants are to duly inform the CSSF of any activation/deactivation of the LMTs as provided for in the UCITS/AIFs documentation. These notifications are to be made through the dedicated eDesk modules.
The Communication further provides that Luxembourg-domiciled funds subject to Part II of the 2010 Law, SIFs and SICARs which do not qualify as AIFs or are not managed by a Luxembourg-domiciled authorised AIFM, shall also notify the CSSF of the activation or deactivation of suspensions of redemptions, repurchases and subscriptions, as well as the creation of side pockets, as required under the respective sectoral law.
Ganado remains available to assist and advise on the below:
- Readiness review checks;
- Drafting LMT Policies;
- Updating Fund Documentation; and
- Communicating with the CSSF.
Get in touch with our Luxembourg team should you require any further assistance.
