Breaking News | The European Commission (the Commission) has recently submitted a communication to the attention of the European Securities and Markets Authority (ESMA) proposing certain amendments to the draft Regulatory Technical Standards (RTS) for the new ELTIF 2.0 regime. These proposed amendments bring positive developments for the funds industry. Here are some of the key proposals:

  1. Redemption notice period: the minimum 12-month notice period for redemptions would be removed;
  2. Liquidity requirements: the high liquidity requirements will shift from a rigid "one-size-fits-all" approach to a more proportional one. This revision considers existing market practices for retail long-term funds and the unique circumstances of ELTIFs;
  3. Liquidity management tools: The Commission advocates aligning ELTIF liquidity management tools with the requirements of the AIFMD framework. It opposes introducing new ELTIF-specific requirements;
  4. Redemption gates: the implementation and activation of redemption gates should not be restricted to "certain specific circumstances" or solely tied to the notice period outlined in the calibration table proposed by the draft RTS;
  5. Cost disclosures: the Commission encourages better alignment between the ELTIF Regulation and the PRIIPs Regulation, MiFID, and the AIFMD regarding the disclosure of costs.

Next Steps: ESMA now has a six-week window to revise its RTS based on the Commission's feedback. Our experts will closely monitor this process and keep you informed of any further developments.

To access the full version of the Commission's communication, please click here.

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