August 2015
On August 10th 2015 the CSSF issued an updated, 9th version of its Frequently Asked Questions (the “FAQ”) concerning the Luxembourg Law of July 12th 2013 on alternative investment fund managers (the “AIFM Law”) as well as the Commission Delegated Regulation (EU) No 231/2013 of December 19th 2012 (the “Level 2 Regulation”).
The FAQ confirm, that neither credit institutions nor investment firms established under the Law of April 5th 1993 on the financial sector, as amended (the “1993 Law”) can obtain an alternative investment fund manager (the “AIFM”) authorisation. However they are allowed to register as an AIFM. They may also manage alternative investment funds (“AIF”) on the basis of a delegation agreement.
The updated FAQ clarify that depositaries of assets other than financial instruments (the “PDAOFI”) can be appointed as depositaries for AIFs, when the following conditions are fulfilled:
- no redemption right exercisable in the AIF for five years from the date of the initial investments, and
- the main investment policy of such AIFs is either generally not to invest in assets which shall be held in custody or generally to invest in issuers or non-listed companies to eventually acquire control.
PDAOFI, when acting as a depositary for eligible AIFs, are responsible for the safekeeping of the assets which are financial instruments. In such case it would have to delegate the custody of such assets to an eligible delegate.
“Also, PDAOFI can act as delegate for the safekeeping of assets other than financial instruments for any type of AIF.„
The FAQ confirm the legislation to be taken into account for the purpose of assessing the initial capital and own funds requirements applicable to external AIFMs. For external AIFMs that are not Chapter 15 management companies the only relevant regulatory provisions are those laid down in the AIFM Law and the Level 2 Regulation. Chapter 15 management companies that are authorised as an AIFM also have to take the provisions of the law of December 17th 2010 relating to undertakings for collective investment, into account.
On reporting, the CSSF confirmed that, based on the provisions of Article 45 of the AIFM Law, a non-EU AIFM will have to report to the CSSF only in the case where this non-EU AIFM is marketing AIFs to professional investors in Luxembourg and as long as the passport regime is not available to non-EU AIFMs.
Additionally, a non-EU AIFM that manages or markets a feeder AIF (whether EU or non-EU) in Luxembourg will also have to report to the CSSF on the non-EU master AIF(s) of such feeder, even if the non-EU master AIF is not marketed in the EU.
Finally the CSSF has also updated its guidance on marketing and reverse solicitation. It is clarified that marketing in Luxembourg does not require physical presence of the AIFM on the Luxembourg territory. However, the marketing activity must take place on the Luxembourg territory. The presentation of draft documents in relation to an AIF by the AIFM to prospective investors does not constitute a marketing activity, provided that such draft documents can’t be used by the investors to formally subscribe or commit to subscribe shares or units of the AIF.
The CSSF provides that reverse solicitation consists in providing information regarding an AIF and making units or shares of that AIF available for purchase to a potential investor following an initiative of that investor (or an agent of that investor) without any solicitation made by the AIF or its AIFM (or an intermediary acting on their behalf) in relation to the relevant AIF. The burden of proof rests with the AIFM.
December 2014
On December 29th 2014 the CSSF issued an update of its Frequently Asked Questions concerning the Luxembourg Law of 12 July 2013 on alternative investment fund managers as well as the Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage transparency and supervision (the “FAQ”).
Question 14 relating to “Reporting Aspects” has been updated. The CSSF has clarified that the first reporting shall be submitted by all AIFMs who have been authorised by December 31st 2014 for January 31st at the latest.
The FAQ is also completed with two new sections dedicated to:
- the marketing of non-EU AIFs to professional investors in Luxembourg without a passport by EU AIFMs on the basis of article 37 of the Law of 2013 and to
- the notification to the CSSF of the acquisition of major holdings and control of non-listed companies on the basis of article 25 of the Law of 2013.
The CSSF has clarified that the marketing of non-EU AIFs to professional investors in Luxembourg without a passport by EU AIFMs, on the basis of article 37 of the Law of 2013, is permitted and is subject to informing the CSSF prior to such marketing and the respect of the Luxembourg Consumer Code. For the purposes thereof the CSSF has made available a special information form on its website. The information provided must also allow the CSSF to identify the entity appointed to carry out the “Depo Lite services” under articles 21(7), (8) and (9) of AIFMD. The FAQ also clarify that a number of different entities could carry out the safe-keeping functions for the same non EU-AIF but that, in the case of the cash monitoring and oversight of operational functions the number of entities per non-EU AIF that can be appointed is limited to a maximum of one entity per duty.
It has been clarified that the requirement to notify the acquisition of major holdings and control of non-listed companies on the basis of article 25 of the Law of 2013 includes, not only every authorised Luxembourg AIFM, but also all non-EU AIFMS marketing AIFs to professional investors in Luxembourg without a passport. Question 20 further clarifies the definition of a non-listed company and provides the different scenarios under which a notification is required and the information to be notified. For the purposes of making the notification the CSSF has made available a special information form on its website.
Expressly excluded from the information to be notified is any information relating to the acquisition of major holdings and control of non-listed companies which are:
- small and medium-sized enterprises falling under the definition of article (2) (1) of the Annex to commission recommendation 2003/361/EC, and
- special purposes vehicles with the purpose of purchasing, holding or managing real estate.
In case where a notification is required same shall occur within 10 working days after the AIF has reached, exceeded or fallen below the relevant threshold.
