The AMF is supplementing its policy on liquidity management tools


On 24 November 2022, the AMF (Autorité des Marchés Financiers), following October’s update of its DOC-2017-05 policy on Gates, published another update relative to the introduction of swing pricing or acquired adjustable rights mechanisms.

Find out more about Gates. | Read the AMF document.

These modifications provide for new requirements if the regulatory documentation of a collective investment undertakings (UCIs) does not include a mechanism to cap redemption requests (Gates*) and/or a mechanism to offset or reduce the costs of portfolio reorganisation borne by all holders during subscriptions and redemptions (swing pricing or Anti Dilution Levies).

These new obligations are applicable immediately for new UCIs and must be complied with by 31 December 2023 at the latest for existing UCIs, if these new or existing UCIs do not include such mechanisms in their regulatory documentation.

Similarly, asset management companies that do not include a swing pricing or Anti Dilution Levies mechanisms in their UCI regulatory documents will have to:

  • State why they have not introduced one of these mechanisms and provide the AMF with a statement acknowledging the risks incurred by the UCI and its investors.

  • Regularly verify, within the framework of the liquidity stress tests, that asset management companies are required to carry out in accordance with the ESMA guidelines with which the AMF complies, the validity of the analysis that prompted them to choose not to introduce one of these tools.

*Read the previous Flash News: The AMF has updated its doctrine on liquidity management tools

Christian de Beaufort, Market Infrastructures & Regulation, Societe Generale Securities Services