AMF sets lower liquidity minima for French evergreen and property funds

France’s AMF introduced its final liquidity instruction on 13 October for non-ELTIF property funds known as OPCIs and open-ended private-capital FCPRs. The regulator says its previous approval practice required a 30–40% liquidity cushion. The new framework calibrates the minimum to redemption frequency or notice, giving managers a more explicit basis for product design.[1]

Below-threshold funds established before 13 October 2026 have two years to comply and file updated documents and stress tests. Already-compliant existing funds update their documentation at the next amendment.[2]

The liquidity promise sets the minimum

Managers can instead calibrate against the notice period; emergency extensions do not count. Buffers can include prudently forecast twelve-month net cash flows, but prospective asset sales or subscriptions count only when already contracted.[2]

A hypothetical fund expecting a €3m receipt in December cannot use that money to pay a July redemption without another source of cash. Its annual liquidity model can therefore look comfortable while an earlier payment date remains unfunded. Timing matters alongside the reported buffer percentage.

Distribution commitments

Wrapper-only funds can reduce the buffer to a uniform annual redemption percentage for each professional investor, secured by written commitments or binding fund terms. Fund-term caps cannot be exceeded at discretion, even with available cash. Collective-investment vehicles or their managers require the fund-term route. For evergreen FCPRs, that route is conditional on the French AIFM II transposing ordinance taking effect.[2]

This makes the distribution arrangement part of the liquidity mechanism. The commercial attraction of investing more of the portfolio depends on the intermediary’s commitment restricting the cash it can demand from the fund. That commitment should not be confused with an assessment of the separate policyholder or savings-product contract. A distributor must explain the rights belonging to the fund investment and the rights belonging to the wrapper on their own terms.[2]

Investment capacity still needs a redemption plan

Consider a hypothetical €100m fund whose monthly-redemption minimum is 25%, with no special relief. If it previously maintained €30m of eligible liquidity, the difference is €5m, or 5% of net assets. Deploying that amount into an illiquid investment would increase exposure to the investment strategy but use up the entire cushion above the minimum. This is capacity released by the assumed figures, not a forecast of improved returns.[2]

Approval stress tests include 40% annual outflows, at least a 20% unlisted-asset markdown unless an alternative is justified, slower disposals and no borrowing.[2]

The stressed redemption path matters because a static percentage can conceal different funding needs. Equal withdrawals over a year and the same total concentrated early in the year leave the manager with different time to collect income or realise investments. The useful question for a product committee is how the fund meets its advertised dealing terms when those cash flows move against it.

Changing redemption frequency or notice in a way that changes the buffer requires prior AMF approval and specific investor information. A reduction in the buffer also gives investors a fee-free redemption option under the updated OPCI and FCPR procedures.[3][4]

Managers therefore have to plan the transition around both portfolio construction and investor behaviour. A change intended to release investment capacity can itself create an exit window. Reserving liquidity for that window before deploying the expected surplus makes the commercial benefit more credible.

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