AIFMD 2.0 and UCITS VI: CSSF Outlines Procedures for LMT Implementation

On 18 March 2026, the CSSF¹ published a Communication² to the investment fund industry in relation to the CSSF’s reporting tools for the liquidity management requirements for Luxembourg-authorised alternative investment fund managers (AIFMs) that manage open-ended alternative investment funds (AIFs) and undertakings for collective investments in transferable securities (UCITS) introduced with the Amendment Directive,³ also known as AIFMD 2.0⁴ and UCITS VI,⁵ (the LMT Communication). This requires that certain filings be made with the CSSF by the implementation deadline for the Amendment Directive of 16 April 2026.

For AIFMs this includes a classification of all the AIFs they manage as open-ended or closed-ended.

Background

The Amendment Directive was transposed in Luxembourg law through the act of 3 March 2026,⁶ which adapted the act of 17 December 2010 on undertakings for collective investment (the Revised UCI Act) and the act of 12 July 2013 on alternative investment funds (the Revised AIFM Act). The Revised UCI Act and the revised AIFM Act will become applicable on 16 April 2026.

AIFMs of open-ended AIFs and UCITS must select at least two appropriate liquidity management tools (LMTs) from items 2 and 8 of Annex V of the Revised AIFM Act and Annex III of the Revised UCI Act. The selection is to be based on an assessment of the suitability of those tools to the AIFs’ and the UCITS’ investment strategy, liquidity profile and redemption policy and is to be made from the following list: (i) redemption gate, (ii) extension of notice periods, (iii) redemption fee, (iv) swing pricing,⁷ (v) dual pricing, (vi) anti-dilution levy and (vii) redemptions in kind (the LMT of Choice).

As a reminder, the right to suspend the subscription, repurchase and redemption of AIF units or shares and the right to create side pockets should always be available to AIFMs and UCITS to use in exceptional circumstances,⁸ where justified and having regard to the interests of investors.

The provisions of the Amendment Directive relating to the LMTs are supplemented by regulatory technical standards (LMT RTS) that specify the characteristics of the LMTs.⁹ Furthermore, to ensure a uniform level of investor protection in the EU, ESMA has developed guidelines on the selection and calibration of LMTs.¹⁰

The Amendment Directive (and accordingly the Revised UCI Act and the Revised AIFM Act) also require detailed policies and procedures for the activation and deactivation of any LMT of Choice and the operational and administrative arrangements for the use of such LMT. AIFMs and UCITS are required to communicate those policies and procedures to their national competent authority, as well as the LMTs of Choice.

The CSSF’s LMT Communication

The LMT Communication informs market participants of the launch of a dedicated “Liquidity Management Tool”¹¹ eDesk procedure, for the digital communication to the CSSF of the LMT-related information.

As a first step, AIFMs will need complete the section of the e-Desk that asks, in respect of each AIF, whether the AIF is open or closed-ended. If the AIF is closed-ended, no further action needs to be taken in respect of that AIF.

For UCITS (or their management companies in the case of FCPs)¹² and AIFMs where the AIF in question is open-ended, there are additional steps to be completed. The LMT Communication explains that the eDesk procedure comprises two modules:

1. the “LMT selection module” - launched on 23 March 2026, that will require AIFMs and UCITS to communicate their selection of LMTs of Choice to the CSSF, together with their detailed policies and procedures governing their activation and deactivation. This information must be communicated to the CSSF by 16 April 2026. After the initial communication and in case of amendments, AIFMs and UCITS remain responsible for ensuring that the information provided is kept up to date;
2. the “LMT activation module” - launching on 16 April 2026, that will require the AIFMs and UCITS to notify to the CSSF, as from that date, the activation/deactivation¹³ of:

• suspensions of redemptions, repurchases and subscriptions;
• any LMT of Choice where it is activated in a manner that is not in the ordinary course of business, as envisaged in the UCITS or AIF documents; and
• side pockets, while ensuring that the CSSF is notified within a reasonable timeframe before the activation or deactivation.

The updating of UCITS prospectuses and the fund documents of open-ended AIFs that are directly regulated by the CSSF need to follow a separate procedure with the CSSF.

Impact

Market participants are, accordingly, advised to finalise (or facilitate the finalisation of) not only LMT of Choice selections, but also any policies and procedures relating to such LMTs as a matter of priority where they are involved in managing or advising UCITS or open-ended AIFs to meet the filing deadline of 16 April 2026.