Why the new ESMA rules do not slow down open-ended credit funds, but enable them

ESMA's final report , which has now been published, not only bundles the results of the consultation, but also contains the revised drafts of the Regulatory Technical Standards (RTS), which were adapted after taking into account numerous market inputs. These RTS proposals form the basis for a European Commission Delegated Regulation, which is expected to be adopted in the first half of 2026 . They determine the conditions under which a fund that grants loans itself may be run openly – i.e. grant redemption rights even though its assets are tied up in the long term. It is about liquidity management, stress tests, return policies – in short: about translating the illiquid real economy into regulated fund language.

Specifically, the rules stipulate that fund managers must take fifteen criteria into account when determining their redemption policy – from the maturity structure of the loans to the composition of the investor base and expected repayment flows. The purpose of this list is not so much control as calibration: the supervisory authority wants to show what adjustments professionalism encompasses today.

The real message, however, is not that the industry is now trusted to have illiquid assets in an open shell for the first time – this has been around for a long time, from real estate funds to infrastructure vehicles. What is new is the context: the supervisory authority is increasingly defining open-ended funds as a regulated system with a built-in risk buffer. AIFMD II, which will apply from April 2026, will for the first time make it mandatory for every open-ended AIF to have at least two liquidity management tools (LMTs) available (money market funds only one), which has already been reported on in this column. For existing funds, a transitional period will apply, probably until spring 2027. The new RTS on open-ended credit funds are therefore not a solitaire, but part of a larger trend: away from the distinction between liquid and illiquid, towards a governance logic in which any openness must be underpinned by regulation.

📌 Result

• The supervisory authority is dragging the private markets world and thus also the open-ended credit funds into the regulatory cosmos that has so far characterised the UCITS sector – with stress tests, reporting routines and ongoing monitoring. The result is a convergence that is changing the market: Anyone who wants to manage long-term assets will have to account for their liquidity architecture in the short term, especially in the case of open-ended credit funds.
• This regulation does not want to prohibit anything, it wants reliable mechanics In a world in which capital markets are increasingly taking on the role of banks, openness needs rules – not good will.
• Open-ended credit funds create long-term platform returns instead of time-limited fund cycles – but they require professionalism, discipline and trust in systems. Accordingly, this column has already reported on the trend towards convergence between AIFMs and credit institutions.
• Only established banks that technologically link regulatory and operational processes can benefit from this with functioning KVG governance and a credible liquidity framework – because it is not only size but also operational resilience that is decisive.