On 23 March 2022, the European Systematic Risk Board (ESRB) published a letter to the Council Working Party and the European Parliament on the Directive on Alternative Investment Fund Managers (AIFMD) Review.

The European Commission’s proposal reflects most of the considerations presented by the ESRB; they particularly welcome the proposal to increase the availability of liquidity management tools for fund managers, helping them to deal with redemption pressures when market liquidity becomes stressed and the proposal to establish a harmonised reporting framework for UCITS and their management companies.

Three areas have not yet been addressed, where EU co-legislators could take the opportunity to further enhance the proposals made:

  1. Addressing liquidity mismatches in open-ended AIFs remains a priority.
  2. Access to data monitoring systematic risk is needed in order to enhance the work of macroprudential authorities.
  3. More guidance is needed on the use of macroprudential leverage limits.

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