Recital 3

(3)Having regard to the investment objectives and redemption policies of an AIF, the threshold for activating a redemption gate should be determined either at the level of the AIF (‘fund-level gate’) or at the level of the investors (‘investor-level gate’), or as a combination of both. In line with the guidance of the International Organization of Securities Commissions for liquidity risk management of open-ended funds ² , the determination of the activation threshold of a fund-level gate should consider the aggregate net or gross redemption orders at the level of the AIF for a given dealing date or over a specified period. In addition, the activation threshold should be expressed as a percentage of the net asset value of the AIF, as a monetary value, as percentage of the liquid assets referred to in Article 50(1) of Directive 2009/65/EC of the European Parliament and of the Council ³ , or as a combination of the above. To mitigate the first mover advantage that may give rise to investor protection concerns and to account for open-ended AIFs with a limited amount of professional investors, the activation threshold of an investor-level gate should consider the individual redemption orders of each investor in the AIF and should be expressed either as a percentage of an investor’s holdings in the AIF or as a percentage of the net asset value of the AIF and compared to that investor’s redemption order. Where the activation threshold is exceeded, an AIFM should be able to decide to activate redemption gates or to still execute redemption orders, having regard to the liquidity of the AIF, the market conditions and the best interests of investors.