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BE - Introduction of additional liquidity tools for Belgian public funds

21/01/2019

On 5th November 2018, the Royal Decree dated 15th October 2018 has been published that aims to introduce additional measures that Belgian public funds may, under certain specific conditions, apply as part of their liquidity management.

The Royal Decree introduces three liquidity tools, which Belgian public funds and management company can now use: swing pricing, anti-dilution levy and redemption gates mechanisms as defined in the Royal Decree. The funds or management companies, which want to use one or several of these mechanisms, will have to modify their documentation according to these new regulation requirements. They must establish previously a policy defining the application conditions of this/these mechanism(s), taking care of potential conflicts of interest, which could result from their use. Depending on the mechanism, the relevant policy must be mentioned in the prospectus, in the periodical reports, and/or in the articles of association or management regulation of the funds.

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