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AIFMD / CSSF's FAQ publication - 21/06/2013


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On 18 June 2013 the CSSF published a list of Frequently Asked Questions (FAQs) concerning the Luxembourg 2013 Bill on alternative investment fund managers (the “Bill”) as well as the Commission Delegated regulation (EU) No 231/2013 of 19 December 2012 (the “Delegated Act”) supplementing the Alternative Investment Fund Managers Directive (AIFMD).

Please find below some important elements included in the FAQ.


Entities concerned

This document is primarily addressed to managers of alternative investment funds (AIFM) and alternative investment funds (AIF) established in Luxembourg.

The CSSF clarifies in the FAQs the notion of AIFM and AIF:

Definition of  AIFs

A collective investment vehicle falls within the AIFs definition if it satisfies the following criteria:

  • Being a collective investment vehicle,
  • Raising capital from a number of investors,
  • With a view to invest it in accordance with a defined investment policy, and
  • Which is not a UCITS.

These are the criteria provided by the AIFMD and further detailed in the ESMA guidelines on AIFMD Key Concepts issued on 24 May 2013.

The CSSF recommends an assessment for each collective investment vehicle to determine whether or not the latter falls into the scope of the Bill and stresses that this is the responsibility of the management of said collective investment vehicle. Charts have been included in the FAQs in order to illustrate the steps which the entities must undertake in order determine their status.

Definition of AIFMs

The definition given by the CSSF in these FAQs is the same as provided by the AIFMD. Nonetheless it has to be noted that once again, the CSSF stressed that it is the responsibility of any entity whose regular business is the management of AIFs to assess whether or not it shall be considered as an AIFM under the Bill. The same as for AIFs, charts have been included in the FAQs in order to illustrate the steps which the entities must undertake in order determine their status.

In this respect, the following Luxembourg entities are likely to be considered as AIFMs:

  • Any Luxembourg entity having adopted the status of a “gestionnaire de fonds d’investissement alternatifs” regulated under the Bill;
  • “Chapter 15” and “Chapter 16” management companies;
  • Internally managed collective investment undertakings established under the Part II of the Law of 2010, internally managed SIFs and internally managed SICARs established in, provided that they qualify as an AIF.

In principle, all AIFMs shall file an authorisation application with the CSSF unless they can apply for a derogation. This corresponds to the de minimis derogation provided by the AIFMD for the benefit of the entities qualifying as AIFMs and whose AIFs total assets under management do not  exceed the following thresholds:

  • EUR 100 million
  • EUR 500 million – for AIFs that are not leveraged and have no redemption rights exercisable during a period of 5 years following the date of the initial investment in each AIF.

Transitional period

The CSSF gives the following clarifications:

Date of establishment of the AIFMs Transitional period
Before 22 July 2013

AIFMs have until 22 July 2014 to submit application for authorisation.


Externally managed regulated AIFs have until their external manager obtains its authorisation or until 22 July 2014 at the latest to apply.

CSSF expects application file to be submitted by 1 April 2014.

22 July 2013 to 22 July 2014

AIFMs have to be compliant as from the moment of their establishment


Externally managed regulated AIFs have to comply as from the moment of their establishment. If their external manager existed before 22 July 2013, the AIF have until the moment their external manager obtains its authorisation as AIFM or until 22 July 2014 at the latest to comply.

After 22 July 2014 AIFMs and Externally managed regulated AIFs have to be compliant from the moment of their establishment.

  
 
Additional information

Delegation

The CSSF confirms the possibility for an AIFM to delegate the portfolio management and the risk management to functions to the extent that compliance with the “letter box” provision of the AIFMD is ensured. Accordingly, both activities cannot be completely delegated but partial delegation of both could be contemplated. In fact, the CSSF points out that portfolio management and risk management are multifaceted functions consisting of various core activities and may therefore be partially delegated.

Incompatibility

Luxembourg credit institution and professionals of the financial sector such as investment firms will not be able to benefit from an authorisation as AIFM. Nonetheless, investment firms will remain able to manage AIFs on a delegated basis.

Cooperation agreements

The CSSF has signed AIFMD cooperation agreements with 34 countries, as listed in point 10 of the CSSF FAQ publication.

Please note that this FAQ is meant to be an evolving document. At this time, there is no comment on custodian responsibilities; an additional FAQ is anticipated on the subject.

You may find the relevant CSSF FAQ publication on the following link:  http://www.cssf.lu/fileadmin/files/Prospectus_OPC/FAQ_AIFMD.pdf.

We trust this information is of assistance and remain at your disposal for any further questions.

 

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Christopher Stuart-Sinclair
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Deloitte Luxembourg
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Directeur - Regulatory Consulting
Phone:
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Email
cstuartsinclair@deloitte.lu
Name:
Marc Noirhomme
Company:
Deloitte Luxembourg
Job Title:
Directeur - Regulatory Consulting
Phone:
+352 451 452 613
Email
mnoirhomme@deloitte.lu

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