In the future, investment funds will need to be on an even sounder footing regarding liquidity risks: In the latest edition of its “Reden wir über Aufsicht” (Let’s talk about supervision) the Austrian Financial Market Authority (FMA) defines its specific expectations for liquidity management by asset managers. The new rules from the EU’s AIFMD II (Alternative Investment Fund Managers Directive II), which are required to be applied from 16 April 2026, form the focal point.
Strengthening of resilience and investor protection
Under the new rules, asset managers will be obliged to select and calibrate at least two additional liquidity management tools (LMTs), and if required to activate them. The objective is to increase the resilience of funds under stress situations and to strengthen investor protection. The FMA emphasises the significance of clear activation criteria, comprehensive documentation and proactive communications with investors.
Practical examples and new tools
The publication uses current practical examples to illustrate the relevance of flexible and forward-looking liquidity management. In addition to established tools like suspensions and side pockets, in the future quantitative LMTs like redemption gates and/or anti-dilution tools will have to be deployed.
Transparency and ongoing monitoring
The effectiveness and suitability of the LMTs used are required to be reviewed on a regular basis and to be adapted where required. The core of the new requirements are the effective exchange with custodian banks as well as informing investors in an easy-to-understand manner.
European Harmonisation and Good Practices
The new rules create a more harmonised framework throughout Europe and also increase the requirements for liquidity management of investment funds. The FMA sets clear expectations for asset managers regarding the selection, calibration, activation and communication of LMTs and recommends investors to check the selected LMTs and their effects carefully prior to purchasing a fund, and as a rule to invest in a diversified manner.
Download and further information:
The full edition of “Reden wir über Aufsicht: Liquiditätsmanagement für Investmentfonds” is available to download on the FMA website.
Journalists may address further enquiries to:
Boris Gröndahl (Media Spokesperson)
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