Read the CySEC Circular C776
Memo #26-2026
CySEC Circular No: C776
Date: 06/05/2026
Subject: Guidelines on Liquidity Management Tools (LMTs) of UCITS and open-ended AIFs (ESMA34-671404336-1364)
Purpose: To inform CUCITS MCs and CAIFMs that ESMA published the Guidelines on Liquidity Management Tools (LMTs) of UCITS and open-ended AIFs.
In Summary:
CySEC has issued the Circular C776 on 06/05/2026 to inform the Cyprus UCITS Management Companies and Self-Managed Cyprus UCITS (‘CUCITS MCs’) and Cyprus Alternative Investment Fund Managers and Self-Managed Cyprus AIFs (‘CAIFMs’), that the European Securities and Markets Authority (‘ESMA’) published the Guidelines on Liquidity Management Tools (LMTs) of UCITS and open-ended AIFs (ESMA34671404336-1364) (the “Guidelines”) on 12/03/2026.
The Guidelines apply to UCITS management companies, including UCITS which have not designated a UCITS management company and Alternative Investment Fund Managers (‘AIFMs’), including internally managed AIFs.
The Guidelines aim, inter alia:
(i) to enhance the resilience of UCITS and AIFs under normal and stressed market conditions,
(ii) to ensure the appropriate selection and calibration of LMTs, taking into account the investment strategy, liquidity profile and redemption policy of the fund, and (iii) to promote investor protection by mitigating liquidity mismatches and reducing the risk of investor dilution.
The Guidelines apply as of 16/04/2026, which constitutes the date of application of the Regulatory Technical Standards for the specification of liquidity management tools (‘RTS’) (dated 17/11/2025), as referred to in Article 18(a)(3) of the amended UCITS Directive and Article 16(2)(g) of the amended Alternative Investment Fund Managers Directive (as amended by Directive (EU) 2024/927). Regarding UCIs existing prior to the date of application of the RTS, the Guidelines shall apply twelve months after that date, namely from 16/04/2027.
CySEC informs that adopts these Guidelines by incorporating them into its supervisory practices and regulatory approach and that CUCITS MCs and CAIFMs must take the necessary action in order to ensure their compliance with the Guidelines.
Circular C776 also refers to a number of requirements that CUCITS MCs and CAIFMs are expected to comply with.
The Guidelines on Liquidity Management Tools (LMTs) of UCITS and open-ended AIFs can be found on the following link:
Read the CySEC Circular C776
Read more news at Regulatory News
