On 18 December 2025, the European Securities and Markets Authority (ESMA) issued a report which makes certain targeted amendments to its guidelines on liquidity management tools (LMTs) of UCITS and open-ended alternative investment funds.

The amendments focus on redemption gates and transition costs for anti-dilution LMTs and are intended to align the guidelines with the draft Regulatory Technical Standards (RTS) on LMTs under the Alternative Investment Fund Managers Directive and UCITS Directive which the European Commission adopted on 17 November 2025. The Commission’s adoption of the draft RTS included certain amendments to the draft RTS submitted by ESMA.

ESMA believes that it is important to publish the revised guidelines prior to the entry into force of the draft RTS to ensure that stakeholders are provided with the relevant guidance in a timely manner. ESMA will monitor whether there is any need to further amend the guidelines before the draft RTS enter into force.

The revised guidelines will be translated into the official EU languages and published on ESMA’s website. The publication of the translations will trigger a two-month period during which Member State competent authorities must notify ESMA whether they comply or intend to comply with the guidelines. The guidelines will apply upon the application date of the draft RTS. Managers of funds existing before the date of application should apply the guidelines in respect of those funds after twelve months from the application date of the draft RTS.