EFAMA supports ESMA’s opinion that special arrangements for management of liquidity risk such as lock‐up periods, side pockets or gates should not be taken into account for determining whether the right of redemption is exercisable by investors at least once a year. Logically, however, lock‐up periods of more than one year should be taken into account when determining the open-ended/closed‐ended nature.
EFAMA suggests that in order for an AIF to qualify as open‐ended AIF, the length of the initial lock‐up period should be restricted to a timeframe one could reasonably expect in relation to the open-ended fund model.
EFAMA is in favour of an alignment with the approach taken under the UCITS framework. EFAMA therefore considers secondary trading should be deemed as equivalent to direct or indirect redemptions if the AIFM takes action to ensure that the stock exchange values of the AIF does not significantly differ from its net asset value.
This being said, EFAMA does not believe that the general possibility to dispose of AIF units/shares on the secondary market should have relevance for determining the type of AIFs. After all, secondary market trading is common in different closed‐ended products, but is usually conducted by third parties without closer involvement of the product provider or any implications for the product as such. Especially, no redemptions out of the portfolio assets are necessary to effectuate the disposal.
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