CSSF Communication on the Enhanced Liquidity Management Requirements for UCITS and AIFMs – 16 April deadline

The Luxembourg Financial Sector Supervisory Commission (CSSF) has clarified how fund managers must comply with new liquidity management rules introduced by the Law of 3 March 2026. Firms have until 16 April 2026 to notify the regulator of their chosen liquidity management tools.

In a communication published on 18 March 2026, the CSSF stated that Luxembourg-domiciled UCITS (or their management companies where relevant) and Luxembourg-authorised alternative investment fund managers (AIFMs) managing open-ended AIFs must select at least two liquidity management tools from those listed in the amended 2010 and 2013 laws.

Key Takeaways

Mandatory Selection of Liquidity Management Tools 

In-scope entities must select at least two liquidity management tools (LMTs) from the lists set out in the amended Luxembourg laws (with a limited exception for money market funds, which may select only one). The selection must be based on a documented assessment of:

• the fund’s investment strategy,
• liquidity profile, and
• redemption policy.

Importantly, the selection cannot consist solely of swing pricing and/or dual pricing mechanisms.

Enhanced Documentation and Investor Disclosure

The selected LMTs must be formally embedded in:

• the fund rules or constitutional documents, and
• investor disclosures, including the UCITS prospectus or AIF disclosures.

Policies and Procedures

UCITS and AIFMs are required to establish robust internal frameworks governing:

• the activation and deactivation of LMTs, and
• the operational and administrative processes supporting their use.

New CSSF Reporting Obligations via eDesk

The CSSF has introduced a dedicated Liquidity Management Tool eDesk procedure comprising two modules:

LMT Selection Module (launch: 23 March 2026)

Requires submission of:

• selected LMTs, and
• detailed policies and procedures governing their activation and desactivation.

Deadline: 16 April 2026

Ongoing obligation to keep information up to date.

LMT Activation Module (launch: 16 April 2026)

Requires ongoing notification of:

• activation/deactivation of LMTs,
• suspensions of redemptions, subscriptions, or repurchases, and
• the creation and use of side pockets (subject to prior notification requirements).

Information reported will be shared with relevant European authorities, including ESMA and the ESRB.

Additional Considerations

• Luxembourg regulated fund which do not qualify as AIFs (Part II funds, SIFs, and SICAR) or are not managed by a Luxembourg authorised AIFM must also comply with notification requirements relating to the activation and deactivation of suspension of redemptions, repurchases and subscriptions as well as side letters.
• Existing CSSF supervisory procedures remain applicable in parallel for the time being for notifications other than those described above.
• Further enhancements to the eDesk system are expected.

Action Points for Market Participants

In-scope entities should:

• assess and select appropriate LMTs without delay;
• update fund documentation and investor disclosures;
• implement or enhance internal liquidity management procedures; and
• prepare for timely reporting via the CSSF eDesk platform ahead of the 16 April 2026 deadline.

For further information or assistance in assessing the impact of these changes, please contact your usual advisor.