Key points include:

1. LMT Activation Module Launch: Effective from 16 April 2026, Luxembourg-domiciled UCITS, their management companies, and Luxembourg-authorised AIFMs managing open-ended AIFs were required to begin notifying the CSSF of the activation or deactivation of:

• • Suspensions of subscriptions, repurchases, and redemptions.
  • Liquidity management tools (LMTs) as specified in the relevant laws, when not in the ordinary course of business.
  • Side pockets, with prior notification to the CSSF within a reasonable timeframe.

2. Scope: The requirements also apply to open-ended funds under Part II of the 2010 Law, specialised investment funds, and investment companies in risk capital, provided they do not qualify as AIFs or are not managed by Luxembourg-authorised AIFMs.
3. Notification Process: Notifications must be submitted via the CSSF's eDesk platform. Information provided is shared with relevant authorities, including ESMA and, where applicable, the ESRB.

For further details, the CSSF’s communiqué can be found here.

Our previous blog post on this matter, referring to the CSSF's communiqué of 18 March 2026, is available here.

CSSF Circular 26/910 on ESMA Liquidity Management Tools Guidelines

On 15 April 2026, the CSSF published Circular CSSF 26/910, informing that it applies the ESMA Guidelines on LMTs of UCITS and open-ended AIFs (ESMA34-671404336-1364), published on 12 March 2026, and is integrating the Guidelines into its administrative practice and regulatory approach with a view to promoting supervisory convergence at European level.

Scope

The circular applies to Luxembourg management companies under Chapter 15 and Article 125-2 of Chapter 16 of the 2010 Law, Luxembourg branches of IFMs under Chapter 17, UCITS investment companies which have not designated a management company, AIFMs authorised under Chapter 2 of the 2013 Law, and internally managed AIFs.

Summary of the Guidelines

The Guidelines are divided into four main sections addressing:

1. General principles
2. Quantitative-based LMTs (suspension of subscriptions, repurchases and redemptions; redemption gates; extension of notice periods; and redemptions in kind)
3. Anti-dilution tools (ADTs) (redemption fees, swing pricing, dual pricing, and anti-dilution levy)
4. Side pockets.

The general principles emphasise that the primary responsibility for liquidity risk management, as well as for the selection, calibration, activation and deactivation of LMTs, remains with the investment fund manager (IFM). IFMs should give due consideration that the selected LMTs will allow effective management of the fund’s liquidity risk under both normal and stressed market conditions and that the selection is as comprehensive as possible to address different circumstances.

In the selection of LMTs, the Guidelines provide that IFMs should consider the merit of selecting at least one quantitative-based LMT and at least one ADT, while also considering selecting one LMT to use under normal market conditions and one LMT to be used under stressed market conditions. IFMs may choose to select more than the mandatory two LMTs.

IFMs should be able to demonstrate at the request of the CSSF that the calibration and activation of the selected LMTs are in the best interest of all investors and are appropriate and effective considering the market conditions and relevant characteristics of the fund.

Entry into force

The Circular with the Guidelines applied as from 16 April 2026. By way of derogation, for funds existing before the date of application, the Guidelines apply twelve months from that date (i.e. 16 April 2027).

For more details, the CSSF’s Circular 26/910 can be accessed here