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2 UCITS & AIFMD
2.1 Adoption of LMT Regulatory Technical Standards by the European Commission and publication of ESMA Guidelines on LMT
Directive (EU) 2024/927 (Omnibus Directive), which amends both the UCITS and AIFMD directives, imposes an obligation on UCITS funds and AIFMs managing open-ended AIFs to select and provide for at least two liquidity management tools (LMT) in relevant fund documentation from 16 April 2026 onwards. These LMTs must be selected from a list set down in the Omnibus Directive.
On 17 November 2025, the European Commission adopted its proposed regulatory technical standards specifying the characteristics of each of the LMTs listed in the Omnibus Directive with the objective being a harmonised approach to the use of LMT throughout the EU.
The LMT comprise of:
(i) Draft regulatory technical standards specifying the characteristics of LMTs under the UCITS Directive (UCITS LMT RTS)
(ii) Draft regulatory technical standards specifying the characteristics of LMTs under AIFMD (AIFMD LMT RTS)
In a related development, ESMA published a report containing its guidelines on the selection and calibration of LMTs by UCITS and AIFMs of open-ended AIFs on 18 December 2025. (ESMA LMT Guidelines).
UCITS and AIFS constituted on or after 16 April 2026 must comply with the RTS and ESMA LMT Guidelines immediately. UCITS and AIFs constituted before 16 April 2026 are not required to comply with the RTS or the ESMA LMT Guidelines until 16 April 2027.
The RTS are now subject to a scrutiny period of 3 months by the European Parliament and the Council of the EU before they are formally published in the Official Journal of the EU (OJ).
On 24 October 2025, the Central Bank confirmed that it will facilitate a streamlined filing process for post-authorisation updates to fund documentation for AIFs and UCITS arising from the transposition of the Omnibus Directive into Irish law and other amendments to its AIF Rulebook and the Central Bank UCITS Regulations (Central Bank Confirmation).
Separately in an ESMA Q&A on AIFMD published by ESMA on 18 December 2025, it confirms that EU AIFMs which manage non-EU AIFs must select at least two LMTs in respect of such non-EU AIFs.
A copy of the UCITS LMT RTS is available here.
A copy of the AIFMD LMT RTS is available here.
A copy of the ESMA LMT Guidelines is available here.
A copy of the Central Bank Confirmation is available here.
A copy of the ESMA AIFMD Q&A is available here.
A detailed analysis of the RTS adopted by the European Commission is available here.
Key Action Points
UCITS and in-scope AIFMs should carry out a gap analysis against the Omnibus Directive and the RTS and, having regard to the ESMA LMT Guidelines, determine required changes to fund documentation, policies and procedures and operational arrangements to comply with the revised Irish UCITS and AIFMD frameworks.
2.2 European Commission publishes proposal to amend UCITS and AIFMD frameworks under EU Market Integration Package.
On 4 December 2025, the European Commission published its proposal on the Market Integration Package.
The proposal, which aims to remove existing barriers to single market integration, will introduce significant changes to the UCITS and AIFMD frameworks as well as the EU Cross-Border Distribution Regulation if implemented as currently proposed as well as amending a range of other EU financial services legislation.
Some of the key proposals put forward by the European Commission of relevance to the asset management sector include:
- bringing EU group companies outside of the scope of the UCITS/AIFMD delegation rules
- introducing the concept of "large EU groups of management companies and AIFMs" and requiring ESMA to conduct an annual review of the supervision of such groups by EU competent authorities
- introducing a harmonised authorisation process for management companies and UCITS funds across the EU
- introducing an automatic passporting framework for UCITS funds and AIFMs marketing to professional investors.
The proposal must now be considered by the European Parliament and the Council of the EU before trialogue negotiations between the three EU institutions begin.
A copy of the proposal is available here.
A detailed analysis of the proposal is available here.
Key Action Points
Irish AIFMs, Irish UCITS management companies and promoters of Irish funds should monitor the progress of the proposal as it is considered by the European Parliament and the Council of the EU over the coming months.
2.3 Developments relating to Open-Ended Loan Originating AIFs
On 1 October 2025, the European Commission wrote to ESMA confirming that it does not intend to adopt regulatory technical standards setting down the criteria applicable to open-ended loan-originating AIFs until October 2027 at the earliest (Letter).
Notwithstanding this, on 21 October 2025, ESMA proceeded with publishing its final report containing draft regulatory technical standards on open-ended loan-originating AIFs (ESMA Final Report). This sets down the requirements which it proposes must be complied with in order for a loan-originating AIF to maintain an open-ended structure.
It remains to be seen what conditions the Central Bank of Ireland will impose on the establishment of Irish domiciled open-ended loan-originating AIFs in the interim period.
A copy of the Letter is available here.
A copy of the ESMA Final Report is available here.
A detailed analysis of the ESMA Final Report is available here.
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