Liquidity management tools (LMTs)

Investment funds must be able to pay out shareholders at any time when they redeem their fund units. To ensure this, the UCITS Directive, the AIFM Directive and national laws require professional and forward-looking liquidity management. Liquidity management tools are part of this liquidity management. They are designed to ensure that:

• redemptions can be serviced in a difficult market environment, taking into account the interests of shareholders
• assets do not have to be sold below value
• all shareholders are treated fairly

These instruments include:

• Suspension
• Redemption gates
• Extension of notice periods
• Redemption fees
• Swing pricing
• Dual pricing
• Anti dilution levy
• Distribution in kind
• Side pockets

These instruments are only intended for use in exceptional market situations. Every management company is obliged to provide suitable liquidity management instruments for its investment funds.