Liquidity Management Terms & Conditions

Part I – Industry Framework and Strategic Rationale

Creating a Standardised, Machine-Readable Framework for Restrictions and Penalties in Liquidity-Managed Funds

1. Introduction

The Challenge

Open-ended funds investing in illiquid or semi-liquid assets increasingly rely on liquidity management mechanisms such as lock-up periods, notice periods, redemption gates, anti-dilution levies, redemption fees and redemption deferrals to align investor dealing activity with the liquidity profile of their underlying portfolios.

As these funds continue to expand across institutional, wealth and retail distribution channels, market participants face growing challenges in administering and interpreting increasingly complex liquidity terms across multiple organisations, platforms and jurisdictions.

Today, these provisions are predominantly documented as unstructured legal text within prospectuses and offering documents. While effective for disclosure purposes, this approach limits automation, creates operational inefficiencies and increases the risk of inconsistent interpretation across the investment ecosystem.

The challenge facing the industry is not the availability of liquidity management tools, but the absence of a standardised classification framework and machine-readable data model through which these terms can be exchanged, interpreted and processed consistently.

Definition: Liquidity-Managed Fund

A liquidity-managed fund is an open-ended investment fund that invests in illiquid or semi-liquid assets and employs one or more liquidity management mechanisms, including lock-ups, notice periods, gates, deferrals, restrictions, fees or dilution mitigation measures, to align investor redemption activity with the liquidity characteristics of the underlying portfolio.

The openfunds Solution

openfunds version 2.14.0 introduces a new Terms and Conditions Configuration (OFTC) framework designed to represent liquidity management terms and investor restrictions in a structured, standardised and machine-readable format.

At the heart of the framework is a common classification model that standardises how liquidity management provisions are categorised across funds, distributors, transfer agents, custodians and platforms. This classification layer is complemented by a comprehensive set of configurable data attributes that define the operational details of each provision. Together, these components enable market participants to transform complex legal provisions into interoperable data that can be exchanged consistently across the fund value chain. Rather than replacing legal documentation, the framework complements existing disclosures by enabling key operational terms to be communicated and consumed digitally.

Strategic Value for the Industry

The benefits of standardisation extend beyond operational efficiency.

By introducing both a common taxonomy and a structured data model, openfunds establishes a common language for liquidity management practices. This enables greater interoperability, automation and consistency of interpretation across the investment ecosystem.

For the first time, restrictions, penalties and liquidity management tools can be represented and analysed consistently across funds, asset classes and jurisdictions, creating opportunities for industry benchmarking, regulatory analysis and enhanced market transparency.

As liquidity-managed funds continue to grow, scalable digital operating models will become an industry necessity. The OFTC framework provides a foundation for this transition.

2. Executive Summary of the OFTC Framework

The openfunds Terms and Conditions Configuration (OFTC) framework is designed to represent liquidity management provisions that are typically static in nature but operationally complex in application.

While existing openfunds Static Data (OFST) fields continue to indicate the existence of a liquidity management feature, OFTC records provide the detailed information required to describe how that feature operates.

The framework is built around five core principles:

• Classification
  Liquidity management provisions are categorized using a standardised taxonomy of restrictions, penalties and liquidity management mechanisms.
• Structured Representation
  Standardised data elements replace inconsistent free-text descriptions and manual interpretation.
• Configurability
  Multiple records can be combined to represent tiered fee structures, phased lock-up releases, redemption thresholds and other complex liquidity arrangements.
• Separation of Application and Calculation
  The framework distinguishes between where a term applies and where it is calculated. For example, a restriction may apply at share-class level while being calculated at investor or subscription-tranche level.
• Interoperability
  Detailed OFTC records complement, rather than replace, existing OFST indicators.
  Each OFTC record follows a one-term-per-row principle, whereby a single row represents one distinct restriction, penalty, trigger, threshold or time-based condition for a specific application context.
  To support regulatory alignment, OFTC005030 enables individual term records to be associated with a specific ESMA Liquidity Management Tool (LMT), while OFST351350 identifies all applicable LMTs at share-class level.

3. Regulatory and Market Context

The increasing adoption of liquidity-managed funds has led regulators to place greater emphasis on the governance, disclosure and operational implementation of liquidity management tools.

Directive (EU) 2024/927 amended both AIFMD and the UCITS Directive by introducing a harmonised framework for Liquidity Management Tools (LMTs). Managers are required to select appropriate liquidity management tools in accordance with the legislation and associated regulatory guidance.

openfunds supports this framework through OFST351350 (ESMA Liquidity Management Tools), which records the liquidity management tools applicable to a share class.

The OFTC framework extends this capability by enabling the detailed operational mechanics of individual liquidity management provisions to be represented in a standardised and machine-readable format.

While OFST351350 records which liquidity management tools apply, the OFTC framework describes how those tools operate, including:

• Restrictions
• Thresholds
• Triggers
• Timing conditions
• Calculation methodologies
• Outcomes

The following liquidity management tools qualify as ESMA LMT values within OFST351350:

• Redemption Gate
• Extension of Notice Periods
• Redemption Fee
• Swing Pricing
• Dual Pricing
• Anti-Dilution Levy
• Redemption In Kind

Certain mechanisms commonly used by funds, including:

• Side Pockets
• Suspension of Subscriptions, Repurchases and Redemptions

do not qualify as ESMA LMTs and are therefore not valid values within OFST351350.

However, both remain valid liquidity management terms from an operational perspective and may therefore be represented within OFTC005020.

For this reason, OFTC005030 (Reference to ESMA LMT) remains optional and will not be populated for many liquidity management provisions.

4. Liquidity Management Classification Framework

The OFTC framework introduces a standardised classification model for liquidity management provisions.

Before describing the operational details of a provision, market participants first classify the type of liquidity management mechanism being represented.

Classification Categories

Classification Category	Examples
Investor Eligibility Restrictions	Initial lock-up periods
Redemption Restrictions	Notice periods
Redemption Controls	Gates, deferrals
Liquidity Protection Measures	Anti-dilution levies
Financial Penalties	Redemption fees
Minimum Retention Requirements	Residual holding rules
Exceptional Liquidity Measures	Side pockets, suspensions

The classification framework provides the foundation for consistency, comparability and future industry analytics.

5. OFTC Data Model Structure

The framework consists of five logical layers.

Layer 1: Classification and Grouping

Field

OFTC005005 Term Grouping Key

OFTC005010 Term Application Level

OFTC005020 Restriction or Penalty Term

OFTC005030 Reference to ESMA LMT

Layer 2: Term Definition

Field

OFTC005040 Term Short Description

OFTC005050 Term Full Description

Layer 3: Timing and Applicability

Field

OFTC005110 Term Time Characteristic

OFTC005120 Term Frequency

OFTC005140 Term Period Start Day Offset

OFTC005150 Term Period End Day Offset

OFTC005160 Calendar or Business Days for Term Period

OFTC005180 Term Application From Period Start in Perpetuity

OFTC005210 Term Reference Date OFID

OFTC005220 Term Reference Date Basis

OFTC005230 Term Actual Reference Date

OFTC008010 Term Valid From

OFTC008020 Term Valid To

Layer 4: Calculation, Triggers and Values

Field

OFTC005250 Term Calculation Level

OFTC005300 Term Percentage

OFTC005310 Term Basis

OFTC005320 Term-related Monetary Amount

OFTC005330 Term-related Monetary Amount Currency

OFTC005340 Term Trigger

Layer 5: Specialised Liquidity Controls

Minimum Retention Rules

Field

OFTC005410 Minimum Investment Retention Requirement

OFTC005420 Minimum Investment Retention Violation Result

Large Redemption Controls

Field

OFTC005440 Large Redemption Trigger

OFTC005450 Large Redemption Trigger Result

OFTC005470 Large Redemption Delay in Days

OFTC005480 Calendar or Business Days for Large Redemption Delays

6. Relationship Between OFST and OFTC

The openfunds liquidity management framework operates across two complementary layers:

Layer	Purpose
OFST – static sata field range	Indicates the existence of a liquidity management feature
OFTC – field range for terms and conditions	Describes the operational mechanics of that feature

For example:

• OFST351350 records that a Redemption Gate applies.
• OFTC records the threshold, timing, trigger conditions and operational behaviour of that gate.

This approach preserves backward compatibility while enabling significantly richer operational detail.

Existing OFST fields remain authoritative where they record a specific operational attribute. Part II, section 1 identifies the relevant redemption-gate fields and explains how they must be reconciled with OFTC.

7. Example Scenarios

• Redemption Notice Period
• Hard Lock-Up Period
• Tiered Early Redemption Fee
• Anti-Dilution Levy
• Redemption Gate
• Large Redemption Deferral
• Side Pocket Event
• Minimum Residual Holding Requirement

8. Conclusion

The OFTC framework introduces both a classification system and a machine-readable representation for liquidity management provisions.

By standardising how restrictions, penalties, triggers and liquidity management tools are classified and exchanged, openfunds provides a foundation for greater automation, interoperability and transparency across liquidity-managed funds.

As the market continues to evolve, the framework establishes a common industry language capable of supporting both current operational requirements and future regulatory developments.

Part II: Technical Specification and Implementation Guide

9. Data Model and Reporting Principle

One row per distinct term or tier

A single share class may have multiple OFTC rows, whilst the share-class identifier is repeated on every applicable row. Fields that do not apply to the specific term remain blank.

Examples:

• A 3% / 2% / 1% redemption fee over three consecutive years requires three rows, one for each time band.
• A redemption gate and a soft lock-up applying to the same share class require separate rows.
• A staged hard lock-up with partial releases requires one row for each release period.

Why the format is deliberately repetitive

The natural instinct when designing a reporting format is to be concise and avoid restating the same value. That instinct is wrong here.

A rule compressed across columns, or written once and inherited by the rows beneath it, cannot be evaluated on its own. Nor can it be checked. Where a row inherits from the row above, a blank cell means either the same value as above or that the field does not apply, and neither a reader nor a validator can tell which, so a wrong value at the top of a block carries silently into everything under it.

Repeating every applicable value on every row fixes both. Each row can be read and applied independently, and a blank means one thing: this field does not apply to this term. There is a cost to that, because a share class identifier written out 75 times is 75 chances of a typo rather than one, but a typo on one row shows up against its neighbours.

Take a fund with fifteen share classes and five rules that apply to all of them. Each rule is written out once for every share class it covers, so the pairing of rule and class is stated on every row rather than inferred. The form produces 75 rows, and for a file whose job is to be read by a machine that is a compact and unambiguous statement of the fund’s terms.

Transmitted data and readable data are not the same artefact

Volume raises a fair objection: nobody can review 75 rows and be confident they are correct. They do not have to. The grouping key (OFTC005005) exists so that the transmitted data can be pivoted back into a form a person can check. The same 75 rows collapse to five entries, one per rule, each listing the share classes it applies to. Both views are generated from the same source, so the reviewer is checking the rules the machine will apply. Data providers are encouraged to offer both views.

What machine readable means here

The term is used loosely across the industry, so the definition here is narrower than common usage.

A file is machine readable for the purposes of this standard when it meets four conditions. Each rule is expressed in a fixed set of named fields rather than in prose. Each field holds a value from a controlled list, a number, or a date in a stated format. Units and bases are stated explicitly rather than implied by symbols or convention, so a percentage is carried as 0.03 and not as “3%”. And each row can be evaluated without reference to any other row.

The transport format is a secondary matter. CSV and Excel both satisfy these conditions and are the formats openfunds expects in practice.

Linking and grouping

• OFST010020 ‘Legal Fund Name Including Umbrella’ refers to the instrument, allowing multiple funds being reported in the same data transmission.
• OFST020000 ‘ISIN’ is the preferred share-class identifier and should be used whenever available.
• If no ISIN is available, OFST020050 ‘Share Class Extension’ must be used to identify the share classes, in combination with OFST010020.
• OFTC005005 ‘Term Grouping Key’ links several rows that together form one logical rule set. The grouping key should be managed as a unique identifier within the reporting party’s own system and must not be reused for unrelated terms.

The ISIN fallback is not an edge case in private markets. Public market reporting can generally assume that a share class has an ISIN and treat the two as interchangeable. Private markets funds frequently have share classes with no ISIN at all, so OFST020050 will be the identifier on a large share of rows rather than a last resort.

Reconciling OFTC rows with existing OFST-fields such as OFST010270 ‘Has Redemption Gates’, OFST010274 ‘Redemption Gate Queue Policy’, OFST010276 ‘Redemption Gate Order Policy’ and OFST010278 ‘Redemption Gate Carried Forward Queue Policy’ remain authoritative for their respective attributes. The corresponding OFTC rows must be consistent with them.

10. Field Blocks

Identity

Identifies the term, its application level, any ESMA reference and human-readable descriptions.

• OFTC005005 ‘Term Grouping Key’: an ID that links multiple rules into a single group.
• OFTC005010 ‘Term Application Level’: indicates whether the term is applicable at the Share Class or Investor level.
• OFTC005020 ‘Restriction or Penalty Term’: indicates which restriction or penalty term is outlined with the relevant details in this data set.
• OFTC005030 ‘Reference to ESMA LMT’: this optional field captures the reference to the Liquidity Management Tool (LMT) chosen according to the ESMA Guidelines (OFST351350).
• OFTC005040 ‘Term Short Description’: provides a brief description of the type of redemption related term.
• OFTC005050 ‘Term Full Description’: captures the relevant wording describing the referenced redemption restriction or penalty, as set out in the official offering documents.

Time window

Describes whether the term repeats, applies during a defined period or applies throughout the life of the share class.

• OFTC005110 ‘Term Time Characteristic’ indicates how the restriction or penalty is applied from a time period perspective.
• OFTC005120 ‘Term Frequency’ carries information related to the frequency of a recurring time period for which the restriction or penalty is applicable.
• OFTC005140 ‘Term Period Start Day Offset’ is the beginning number of days, counted from the reference date given in OFTC005210 or OFTC005220, from which the penalty/restriction applies.
• OFTC005150 ‘Term Period End Day Offset’ is the ending number of days, counted from the reference date given in OFTC005210 or OFTC005220 (reference date = day 0), through which the penalty or restriction applies; the end day is inclusive.
• OFTC005160 ‘Calendar or Business Days for Term Period’: this field defines whether the period of days stated in OFTC005140 ‘Term Period Start Day Offset’ and OFTC005150 ‘Term Period End Day Offset’ refer to calendar days or to business days. Required if OFTC005140 ‘Term Period Start Day Offset’ is populated.
• OFTC005180 ‘Term Application From Period Start in Perpetuity’: this field should only indicate “yes” if the term (or the constraint it establishes) continues indefinitely from the specified ‘Term Period Start Day Offset’ with no end – for example a reduced fee that then applies for all time.
• OFTC005210 ‘Term Reference Date OFID’ lists the OFID of a static data field that this redemption related term references (i.e. OFST020560 ‘Share Class Launch Date’). Leave blank if not applicable.
• OFTC005220 ‘Term Reference Date Basis’ indicates the date that is the basis upon which the specified period is counted (i.e. ‘Subscription Date’). Only to be used if OFTC005210 is empty or not applicable.
• OFTC005230 ‘Term Actual Reference Date’ indicates the actual date referred to in OFTC005220 ‘Term Reference Date Basis’.

OFTC005210 and OFTC005220 are alternatives. Where the reference date is an existing openfunds field, use OFTC005210 and leave OFTC005220 blank. Where it is not, use OFTC005220. Populating both is a validation error.

Quantification

States the calculation level, percentage, basis and optional monetary amount.

• OFTC005250 ‘Term Calculation Level’ indicates the level at which the logic for the penalty/restriction is calculated or determined upon. Note that this field is different from OFTC005010 ‘Term Application Level’, as the calculation of term specific restrictions can be based on a different level than the term reference. For example, a quarterly gate written into the terms of Class B, but assessed against total redemption requests across the entire fund, is applied at Share Class and calculated at Fund.
• OFTC005300 ‘Term Percentage’: the applicable percentage of the term, entered as a positive decimal fraction only (e.g. 3% = 0.03, 50% = 0.5), rounded to a maximum of 7 digits after the decimal point. For a Redemption restriction, the percentage represents the cumulative proportion of the holding permitted to be redeemed by the end of the band, rather than the incremental fraction released during that period (0 = fully restricted, 0.5 = half of the holding redeemable in total at that point, 1.0 = the entire position redeemable).
• OFTC005310 ‘Term Basis’ – The basis upon which the percentage applies and is calculated.
• OFTC005320 ‘Term-related Monetary Amount’ indicates a static monetary value upon which the term is applied.
• OFTC005330 ‘Term-related Monetary Amount Currency’ indicates the currency of the monetary value upon which the term is applied, when applicable.

Triggers and retention

Captures threshold conditions and minimum-investment-retention mechanics.

• OFTC005340 ‘Term Trigger’ indicates a threshold condition over which a fee, penalty or restriction applies.
• OFTC005410 ‘Minimum Investment Retention Requirement’: used if the fund has a minimum investment retention requirement below which the investor’s remaining invested capital must not fall, and which – if breached – triggers the action in OFTC005420 ‘Minimum Investment Retention Violation Result’ (typically compulsory redemption).
• OFTC005420 ‘Minimum Investment Retention Violation Result’ indicates the resulting action taken by the fund if the minimum investment retention is violated.

Large redemptions

Captures thresholds that lead specifically to delayed or deferred execution.

• OFTC005440 ‘Large Redemption Trigger’: in some instances, a share class defines a “Large Redemption” as a redemption exceeding a certain threshold that triggers a delay or a deferred execution of the redemption request.
• OFTC005450 ‘Large Redemption Trigger Result’ indicates what happens if the large redemption trigger is activated.
• OFTC005470 ‘Large Redemption Delay in Days’ indicates if the large redemption triggers a delay in the execution of the redemption by a number of days.
• OFTC005480 ‘Calendar or Business Days for Large Redemption Delays’ defines whether the period of days stated in OFTC005470 ‘Large Redemption Delay in Days’ refers to calendar or business days.

Use OFTC005340 where exceeding the threshold produces a fee, penalty or restriction. Use OFTC005440 only where exceeding it changes when or how the request is executed. The size of the threshold does not determine which field to use.

Validity period

Defines the optional calendar date range during which a terms and conditions rule is valid and active.

• OFTC008010 ‘Term Valid From’: optional field indicating the date from which this term condition is valid (YYYY-MM-DD). If left blank, no start date restriction applies.
• OFTC008020 ‘Term Valid To’: optional field indicating the date until which this term condition is valid (YYYY-MM-DD). Only applicable if OFTC008010 is populated.

If a data transmission is intended to communicate only current terms and conditions without historical records, openfunds recommends using these fields for internal storage or reference rather than ongoing delta transmission.

11. Key Concepts

Three choices determine every row: which term type it is, how its timing is expressed, and the level at which it is calculated. Every other field follows from those three.

Restrictions and penalties

A restriction prevents a valid redemption request. There is no price at which the investor can redeem. A penalty permits the redemption but attaches a consequence to it: a charge, a deduction, a delay, or settlement in something other than cash.

The distinction has operational consequences. A restriction is evaluated before a request is accepted. A penalty is evaluated after acceptance and changes what the investor receives or when they receive it. A system consuming this data needs to know which of the two it is looking at before it can do anything useful with the row.

The market’s existing vocabulary of hard lock-ups and soft lock-ups covers only a small part of this territory. A hard lock-up is one kind of restriction. A soft lock-up is one kind of penalty, specifically a redemption fee. Neither term extends to gates, holdbacks, payout delays, minimum retention rules or redemption in kind. Funds apply all of those, and investors need to see them.

OFTC005020 ‘Restriction or Penalty Term’

OFTC005020 uses a controlled list of 13 values plus ‘other’. Select the value that best describes the row.

Restriction terms: the investor cannot redeem

• Redemption restriction: a hard lock-up. Redemptions are fully or partially blocked for the specified period.
• Suspension of subscriptions, repurchases and redemptions: a temporary halt of all dealing in exceptional circumstances.
• Side pockets: illiquid assets are ring-fenced and cannot be redeemed until realised.

Management terms: redemption is permitted, with a cost, condition or delay

• Redemption fee: a charge on the redeeming investor. This is the standard soft lock-up mechanism.
• Redemption gate: caps aggregate redemptions for a specified period.
• Subscription anti-dilution levy: protects existing investors from the cost of deploying new capital.
• Redemption Anti-dilution levy: protects remaining investors from the cost of liquidating assets.
• Redemption in kind: permits settlement by transferring assets rather than cash.
• Holdback: withholds a portion of proceeds until final values are confirmed.
• Payout delay: defers settlement of the full redemption amount beyond the standard settlement date.
• Extension of notice periods: extends the standard redemption notice window carried in OFST410065 ‘Cut-Off Date Offset for Redemption’.
• Minimum retention: permits compulsory redemption of a holding that falls below a required minimum.
• Large redemption: a redemption exceeding a stated threshold, which changes when or how the request is executed.

Other

Represents a fallback only to be used if none of the above is applicable. It is highly recommended to make the term as clear as possible in the description fields (OFTC005040 / OFTC005050).

A row marked ‘other’ is a signal to the consuming system that this term cannot be evaluated automatically and requires a person to read it. Treat it as an instruction to route the row for human review rather than as a value to be processed.

OFTC005110 ‘Term Time Characteristic’

Day counting

The reference date is day 0. The end date is inclusive. Consecutive bands should run without overlap or gaps, e.g. 0 to 365, 366 to 730 and 731 to 1095. Use OFTC005180 = “yes” only when a specified-period state continues indefinitely from its start date.

Value	Use	Required supporting fields
Recurring Frequency	The term resets and applies again in each period, e.g. a quarterly gate.	OFTC005120 Term Frequency
Specified Period	The term applies between day boundaries counted from a reference date.	OFTC005140 / OFTC005150 / OFTC005160 and reference-date fields
Perpetual	The term applies for the entire life of the share class.	No additional time-period fields

Recurring Frequency and Perpetual are easily confused. The difference is whether the assessment resets.

A quarterly gate is a Recurring Frequency. Each quarter the fund totals the redemption requests received, tests them against the threshold, applies the gate if it is breached, and then starts again from zero, carrying nothing across from the previous period except any queue the fund’s order policy holds over.

A 3% fee charged on every redemption for the life of the share class is Perpetual. There is no period and nothing to reset.

The time characteristic describes the life of the term, not any measurement window inside the trigger. A term that is always in force, but whose threshold is assessed monthly, is Perpetual, and the monthly assessment belongs in OFTC005340 or OFTC005440. This is a common source of error.

Application level (OFTC005010) versus calculation level (OFTC005250)

OFTC005010 ‘Term Application Level’ describes where the term is applied, while OFTC005250 ‘Term Calculation Level’ describes the level at which its logic is calculated. These levels may differ.

OFTC005250 Term Calculation Level	Meaning	Typical example
Fund	Calculated using the entire fund or a broader stated perimeter.	A gate triggered when total requests exceed 10% of fund NAV.
Share Class	Calculated collectively across all investors in one class.	A class-level quarterly gate.
Investor	Calculated against one investor’s overall position.	A restriction based on the investor’s first subscription date.
Subscription Tranche	Calculated separately for each individual subscription or lot.	A fee applying for 18 months from each subscription date.

Why fund level exists. Managers frequently run parallel vehicles for the same strategy, for instance a Luxembourg fund alongside a Delaware fund. Where they do, liquidity is commonly managed against a single cash pool. Redemption requests are aggregated across both vehicles, the gate is assessed once against that total, and payments are made to investors in both vehicles from the same pool. Calculating such a gate at share class level would produce the wrong answer. Where the perimeter extends beyond a single legal entity, set OFTC005250 = ‘Fund’ and state the perimeter explicitly in OFTC005310 ‘Term Basis’.

Why subscription tranche exists. This is the level that surprises people coming from public markets.

A listed share is fungible. Two investors holding the same line of stock hold identical assets, and swapping them changes nothing for either party. Shares in an evergreen fund are not fungible in the same way. When they are issued they carry attributes that persist: the date of issue, and therefore the holding period clock that every time-based term counts from.

If one investor subscribed four years ago and another subscribed last week, and the fund charges 3% on redemptions in the first year from subscription, then the two investors hold shares that behave differently. They hold the same class at the same NAV on different terms. Any platform, transfer agent or administrator supporting these funds has to track shares at the tranche in which they were issued, because the rules cannot be evaluated at any coarser level.

Some parts of the market call these lots rather than tranches. They are the same thing: the shares issued in a single dealing cycle, all carrying the same clock.

Population Rules and Validation

• Populate OFTC005040 ‘Term Short Description’ with a concise title that clearly distinguishes the row from other terms for the same share class.
• Use OFTC005050 ‘Term Full Description’ for the relevant offering-document wording when additional context is needed.
• Populate OFTC005300 ‘Term Percentage’ as a positive decimal fraction: 0.03 means 3%; 0.5 means 50%.
• Always populate OFTC005310 ‘Term Basis’ when OFTC005300 ‘Term Percentage’ is used, so the denominator is explicit.
• Use OFTC005340 ‘Term Trigger’ for a condition that produces a fee, penalty or restriction. Use OFTC005440 ‘Large Redemption Trigger‘ only when exceeding the threshold results in delayed or deferred execution.
• For compound thresholds, describe the full logic in free text. The monetary leg may additionally be captured in OFTC005320 ‘Term-related Monetary Amount’ and OFTC005330 ‘Term-related Monetary Amount Currency’.
• Where the exact calculation perimeter extends across parallel vehicles, use OFTC005250 ‘Term Calculation Level’ = ‘Fund’ and state the perimeter explicitly in OFTC005310 ‘Term Basis’.
• Leave a field blank where it does not apply to the term. Do not enter zero to indicate non-applicability. Where zero is itself a meaningful value, for example a staged release in which no portion may be redeemed during the first band, enter 0 and make the meaning explicit in OFTC005310 ‘Term Basis’.
• Populate OFTC005160 whenever OFTC005110 = ‘Specified Period’. A day count with no stated day basis is ambiguous.
• Do not populate both OFTC005210 and OFTC005220 on the same row.
• Where consecutive bands describe one rule, they must run without gaps or overlaps, and they must share a grouping key.

12. Examples

The five examples below run from the most common arrangement to the most awkward. The first two cover terms that appear in a large proportion of evergreen funds. The last three show how far the model stretches.

Example 1: Tiered soft lock-up with redemption fees

Class A Shares carry an early-redemption fee, calculated separately for each subscription: 3% in year 1, 2% in year 2 and 1% in year 3. No fee applies after day 1095.

OFTC005020	OFTC005110	OFTC005140	OFTC005150	OFTC005160	OFTC005250	OFTC005300	OFTC005310
Redemption fee	Specified Period	0	365	calendar days	Subscription Tranche	0.03	NAV of shares redeemed
Redemption fee	Specified Period	366	730	calendar days	Subscription Tranche	0.02	NAV of shares redeemed
Redemption fee	Specified Period	731	1095	calendar days	Subscription Tranche	0.01	NAV of shares redeemed

Also populate: OFTC005010 = Share Class; OFTC005030 = Redemption fee; OFTC005220 = Subscription Date; OFTC005180 = no; and a shared OFTC005005 grouping key across all three rows.

The fee is written into the terms of the share class, so it is applied at share class level, but it is assessed against each subscription independently. An investor who subscribed in year 1 and topped up in year 3 holds two tranches on two different clocks, and a redemption may attract 1% on part of the holding and 3% on the rest.

Example 2: Quarterly redemption gate

Class B Shares are subject to a quarterly gate. Aggregate redemptions are capped at 5% of the fund’s NAV. Excess requests are processed pro rata and carried forward without special priority.

OFTC005020	OFTC005030	OFTC005110	OFTC005120	OFTC005250	OFTC005300	OFTC005310
Redemption gate	Redemption gate	Recurring Frequency	quarterly	Fund	0.05	Fund NAV

Related OFST fields: OFST010270 = yes; OFST010274 = Pro rata; OFST010276 = Carried Forward; OFST010278 = Pro rata with no priority.

Also populate: OFTC005010 = Share Class; OFTC005040 = ‘5% quarterly redemption gate’; OFTC005050 with the relevant prospectus wording.

The gate is a term of Class B, so OFTC005010 = Share Class, but the 5% is measured against the fund’s NAV rather than the class’s, so OFTC005250 = Fund. Setting both to Share Class is the most common error on this term type, and it produces a different answer because the two denominators are different sizes.

Example 3: Large redemption resulting in delayed execution

Class C Shares apply a large-redemption delay assessed per investor. Where a single investor’s aggregate redemption requests in a given month exceed the higher of EUR 5,000,000 and 3% of the fund’s net assets, the request is deferred and executed at the redemption NAV of the seventh month following the relevant Redemption Centralisation Date.

OFTC005020	OFTC005110	OFTC005250	OFTC005440	OFTC005450	OFTC005470	OFTC005480
Large redemption	Perpetual	Investor	Higher of EUR 5,000,000 and 3% of fund net assets, assessed monthly per investor	Deferred execution	180	calendar days

Also populate: OFTC005010 = Investor; OFTC005320 = 5000000; OFTC005330 = EUR; OFTC005050 with the full prospectus wording. OFTC005030 remains blank, because a large-redemption delay is not itself one of the seven ESMA LMT values.

The time characteristic is Perpetual even though the trigger is measured monthly. The term itself never lapses; only its assessment recurs. The monthly window belongs in OFTC005440, not in OFTC005110.

The field set cannot fully represent the settlement mechanic. The prospectus specifies execution at the NAV of the seventh month following centralisation, which is a statement about which price is used, not only about how long the investor waits. OFTC005470 carries the delay in days as an approximation. The pricing point must be recorded in OFTC005050 and read by a person (see also chapter 14 ‘Known Limitations’).

Example 4: Tiered redemption restriction with staged releases

A subscription tranche is fully locked for its first 180 days. From day 181, up to 50% of the tranche may be redeemed. From day 211 the cumulative permitted amount rises to 75%, and from day 241 the whole tranche may be redeemed.

Term Percentage on these rows carries the cumulative proportion of the tranche that may be redeemed by the end of each band, not the increment released during it. Term Basis states this explicitly on every row.

OFTC005020	OFTC005110	OFTC005140	OFTC005150	OFTC005180	OFTC005250	OFTC005300	OFTC005310
Redemption restriction	Specified Period	0	180	no	Subscription Tranche	0	Cumulative proportion of tranche NAV permitted to be redeemed
Redemption restriction	Specified Period	181	210	no	Subscription Tranche	0.50	Cumulative proportion of tranche NAV permitted to be redeemed
Redemption restriction	Specified Period	211	240	no	Subscription Tranche	0.75	Cumulative proportion of tranche NAV permitted to be redeemed
Redemption restriction	241			yes	Subscription Tranche	1.00	Cumulative proportion of tranche NAV permitted to be redeemed

All four rows share one OFTC005005 grouping key. All four use OFTC005110 = Specified Period and OFTC005160 = calendar days.

The first row carries 0 rather than a blank, because zero is the meaningful value: no part of the tranche may be redeemed. This is the exception to the general rule that unused fields are left blank.

The final row has a start day, no end day, and OFTC005180 = yes. That combination is how an open-ended final band is expressed, and this is the only construction in which OFTC005180 should be set to yes.

Cumulative rather than incremental percentages are a choice, and the paper states it because the underlying prospectus wording (“a further 25%”) is incremental. Either convention can be encoded, but only one can be the standard, and a consuming system has no way to tell which is intended unless Term Basis says so.

Example 5: Holdback

When an investor redeems the entire position, up to 5% of the redemption proceeds may be withheld until the NAV is audited and confirmed.

OFTC005020	OFTC005110	OFTC005250	OFTC005300	OFTC005310	OFTC005040
Holdback	Perpetual	Investor	0.05	NAV being redeemed	Up to 5% holdback on a full redemption pending final NAV confirmation.

The words ‘up to’ carry a meaning the field set cannot capture. OFTC005300 records the maximum, and the actual amount withheld is at the fund’s discretion within that cap. Where a term is expressed as a ceiling rather than a fixed rate, record the ceiling and say so in OFTC005040.

13. Suggested Implementation Process

This format asks more of the reporting party than a boolean flag does. A single field recording that a fund has redemption gates is trivial to populate and tells a consumer almost nothing. The OFTC rows take real effort to compile and can be evaluated by a machine. The working group’s judgement was that the second is worth the cost, particularly because these terms are largely static: once a share class has been mapped, the rows change only when the offering documents do.

1. Identify the term.
Confirm the existing OFST flag or source prospectus wording and select the closest OFTC005020 ‘Restriction or Penalty Term’ value.

2. Determine row count.
Split tiered or staged mechanics into separate rows. Keep distinct term types separate.

3. Link the record.
Repeat the share-class identifier and assign a grouping key where multiple rows form one logical rule set.

4. Describe timing.
Select recurring, specified-period or perpetual and populate only the supporting fields required for that choice.

5. Quantify the rule.
Set the calculation level, positive decimal percentage, basis and optional monetary threshold.

6. Capture triggers and outcomes.
Use the general trigger fields or the large-redemption fields according to whether the result is a restriction or fee or a delay.

7. Reconcile.
Validate the OFTC rows against existing other data fields (e.g. from the OFST-range), queue policies, order policies, pricing fields and source documents.

On the extraction effort

The compilation step is the part that looks daunting, because the source is a long prospectus written in prose rather than a data file.

It is now considerably more tractable than it was. Large language models are capable of reading an offering document and producing a populated OFTC template, with each row carrying the source text it was drawn from so that a person can verify it. In a demonstration to the working group in July 2026, a 224 page evergreen fund prospectus was processed into a populated template covering every share class in the fund in a few minutes.

The output is a draft requiring review by someone who knows the fund. That review depends on the extract carrying its source wording, which is why OFTC005050 should be populated with the offering-document text rather than a paraphrase.

14. Known Limitations

The field set covers most terms found in evergreen and semi-liquid funds today. The following are known gaps rather than oversights.

Pricing points in deferred settlement. OFTC005470 records a delay in days. Where a fund specifies which NAV a deferred redemption executes at, for example the NAV of the seventh month following a centralisation date, that pricing point cannot be encoded and must be carried in OFTC005050 for human reading. See the large redemption example in section 6.

Periods expressed in months from a variable date. Day counts are exact and machine-evaluable. A term expressed as six months from a centralisation date is neither, because the number of days varies with the date. The current approach is to encode an approximation in days and state the exact wording in OFTC005050.

Compound thresholds. OFTC005340 and OFTC005440 are free text. A threshold combining a monetary floor and a percentage, such as the higher of EUR 5,000,000 and 3% of net assets, is recorded as text with the monetary leg additionally captured in OFTC005320 and OFTC005330. It cannot be evaluated without parsing.

Discretionary ceilings. Where a term sets a maximum rather than a rate, the field set records the maximum. The fund’s exercise of discretion within that maximum is not represented. See the holdback example in section 6.

Terms marked ‘other’. By design, these require a person. A consuming system should route them rather than attempt to process them.

15. Sample Reporting Template

openfunds provides two standardized Excel workbooks to accompany the Terms and Conditions (OFTC) specification:

• Empty Transmission Template (openfunds_OFTC_v2.14.0_Empty_Template.xlsx): A clean, ready-to-use template containing the 29 OFTC fields alongside core fund identification headers (Fund Name, Share Class Extension, ISIN), complete with data types and field level constraints.
• Populated Reference Implementation (openfunds_OFTC_v2.14.0_Populated_Sample.xlsx): A multi-share-class sample illustrating the implementation of the core terms and conditions across five distinct share classes: (i) soft lock-up with tiered early redemption fees, (ii) quarterly redemption gate, (iii) large redemption threshold with deferred settlement, (iv) tiered redemption restriction with staged milestone releases, and (v) full redemption holdback alongside minimum retention capital requirements.

Document Information

Title:	Liquidity Management Terms & Conditions
Language:	English
Confidentiality:	public
Authors:	openfunds (Birgit Partin), Jonathan Hyde (Titanbay), Maryam Longrus (FE fundinfo), Brian Higgins (Clearstream), Piotr Nedzi (HedgePole), Borja Gonzalez Garcia (Allfunds)

Revision History

Version	Date	Status	Notice
1.0	2026-09-24	Finalised version for publication	Final small edits and upload on openfunds website.
0.5	2026-09-17	Consultation Draft Aligned	Aligned against canonical openfunds v2.14.0 draft release. Field names, controlled value casing, and validity fields updated. Section 9 sample templates referenced.
0.3	2026-08-11	Draft	Opening restructured. Field names and controlled values aligned with the finalised field list.
0.2	2026-08-05	Draft	Working draft for working group review. Webinar material incorporated, corrections applied, Known Limitations added.
0.1	2026-07-16	Draft	First version

Implementation

If you have any questions about the new data type or difficulties with implementation, please contact us at businessoffice@openfunds.org.

Joining openfunds

If your firm has a need to reliably send or receive fund data, you are more than welcome to use the openfunds fields and definitions free-of-charge. Interested parties can contact the openfunds association by sending an email to businessoffice@openfunds.org.

openfunds.org
c/o Balmer-Etienne AG
Bederstrasse 66
CH-8002 Zurich
Email: businessoffice@openfunds.org

If you wish to read or download this white paper as PDF, please click here.