ALFI responds to the ESMA consultation on loan-originating AIFs

The revised AIFMD provides that ESMA shall develop draft RTS to determine the requirements with which loan-originating AIFs are to comply in order to maintain an open-ended structure. According to the mandate in the AIFMD, those requirements shall include a sound liquidity management system, the availability of liquid assets and stress testing, as well as an appropriate redemption policy having regard to the liquidity profile of loan-originating AIFs. Those requirements shall also take due account of the underlying loan exposures, the average repayment time of the loans and the overall granularity and composition of the portfolios of loan-originating AIFs.

In its response, ALFI welcomes ESMA’s conclusion that the existing AIFMD liquidity management regime is robust, as no gaps were identified.

ALFI is of the view that a required level of liquid assets should not be defined on a pre-launch/product basis, as various criteria need to be considered to assess the liquidity of a fund. Generally, ALFI stresses in its submission that AIFMs are best positioned to assess the liquidity and determine a suitable liquidity management system for their funds. In this regard, it is worth noting that AIFMs typically have redemption/liquidity policies for groups of funds of the same type, so ALFI would not see a need to draft separate policies for each single fund.

View the ALFI response.