Last Friday (25 October), the so-called RTS (regulatory and technical standards) which provide for specific details in relation to the recently updated ELTIF Regulation were published in the official journal of the EU.

Quick recap what that is about :

– The new ELTIF Regulation entered into force in January this year and significantly improved this product’s attractiveness since its initial launch in 2015.

– Some – rather crucial – details were left out and delegated to another subsequent European Regulation, the RTS. A first draft of these was proposed by ESMA back in December 2023, but quite a few points were rejected by the European Commission some months later. In July 2024 the Commission proposed a new draft, and as there have been no objections since then this version has now been published and entered into force a day later.

The RTS mainly deal with conditions for open-ended ELTIFs, i.e. those that investors can get out of. It deals with how such redemptions can be organised, which type of liquidity management tools should be used and – most importantly – which percentage of liquid assets such an ELTIF needs to have in its portfolio.

The RTS are applicable immediately, which is also the reason why most ELTIFs established in the recent past have been closed-ended in nature, as the discussions around the RTS needed to be finalised first. Now that there is legal certainty, hurdles for establishing an open-ended ELTIF have certainly been reduced significantly.