These RTS aim to enhance financial stability and bolster investor protection, particularly during periods of market stress.

These standards provide detailed specifications for the characteristics of various LMTs, ensuring their consistent application and operation. Moreover, they establish a clear and predictable legal structure for managing fund liquidity, empowering managers with a robust toolkit to handle redemption pressures while safeguarding the interests of all fund investors.

The core objective of RTS on LMTs governing AIFMs and UCITS is to provide them with a standardised set of instruments to manage liquidity risk effectively, thereby protecting investors and containing potential spillover effects in the market. These RTS will apply from 16 April 2026. Alternative investment funds (AIFs) constituted before this date are granted a transitional period until 16 April 2027 to comply.

Key features of these RTS on LMTs include:

• Suspension of subscriptions, repurchases and redemptions: An AIFM or UCITS must suspend subscriptions, repurchases, and redemptions simultaneously and for the same duration. This measure is intended to be temporary and is applied only in exceptional circumstances where it is in the best interests of investors.
• Redemption gates: AIFMs or UCITS are permitted to activate redemption gates once a predetermined activation threshold is met.
• Extension of notice periods: The RTS allows AIFMs or UCITS to extend the notice period required for redemptions.
• Redemption fees: Redemption fees must consider the estimated explicit transaction costs and where appropriate the implicit ones and any important market impact of asset sales.
• Swing pricing: The RTS provide that swing pricing could be applied in case of a difference between redemption and subscription orders or in a case where the difference would exceed a predefined activation threshold.
• Dual pricing: Provides calculation methods in cases where the AIFM or UCITS activates dual pricing.
• Anti-dilution levies: Must include estimated explicit transaction costs and where relevant the implicit transaction costs and any significant market impact of asset sales or purchases.
• Redemption in kind: Corresponds to the transfer of assets that the AIF or UCITS holds for the purpose of redeeming investors instead of cash.
• Side pockets: These new RTS provide the forms that side pockets can take, input with respect to their share class and the activation of a side pocket.

The new RTS on LMTs governing AIFMs can be found here

The new RTS on LMTs governing UCITS can be found here