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FUND 3.6 Liquidity

Application

FUND 3.6.1R

This section applies to a full-scope UK AIFM of:

  1. (1)

    a UK AIF;

  2. (2)

    an EEA AIF; and

  3. (3)

    a non-EEA AIF.

Alignment of investment strategy, liquidity profile and redemption policy

FUND 3.6.2R

An AIFM must ensure that the investment strategy, liquidity profile and redemption policy of each AIF it manages are consistent.

[Note: article 16(2) of AIFMD]

Liquidity systems and procedures

FUND 3.6.3R

An AIFM must, for each AIF it manages that is not an unleveraged closed-ended AIF:

  1. (1)

    employ an appropriate liquidity management system and adopt procedures which:

    1. (a)

      enable it to monitor the liquidity risk of the AIF; and

    2. (b)

      ensure that the liquidity profile of the investments of the AIF complies with the AIF's underlying obligations; and

  2. (2)

    regularly conduct stress tests, under normal and exceptional liquidity conditions, which enable it to assess the liquidity risk of the AIF and monitor that risk.

[Note: article 16(1) of AIFMD]

Subordinate measures

FUND 3.6.4G

Articles 46 to 49 of the AIFMD level 2 regulation provide detailed rules supplementing this section.