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Luxembourg’s amended SIF law comes into force

April 2012 - Finance. Legal Developments by Chevalier & Sciales .

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Luxembourg’s legislation amending the February 2007 law on Specialised Investment Funds came into force on April 1, following publication in the country’s official gazette, the Mémorial, on March 30. It is now identified as the law of March 26, 2012, the date on which it received royal assent.

The revised legislation was submitted to Luxembourg’s Parliament, the Chamber of Deputies, on August 12 last year, and it was adopted on March 6. The law is designed to adapt the highly successful SIF regime to European and international developments regarding regulation and transparency of alternative investments, including the European Union’s Directive on Alternative Investment Fund Managers.

Existing SIFs must comply with the new requirements on risk management procedures, measures designed to avoid or mitigate conflicts of interest and methods of verifying investor eligibility by June 30 this year, while the rules regarding delegation must be implemented by June 30, 2013.

The legislation applies to new SIFs immediately. A total of 1,402 SIFs with assets of €249.4bn in assets under management were established in Luxembourg as of the end of February, according to the industry regulator, the Financial Sector Supervisory Authority (CSSF).

The revised legislation reflects the provisions not only of the AIFM Directive, which will take effect on July 22, 2013, but also some parts of Luxembourg’s funds legislation of December 17, 2010, which transposed the Ucits IV Directive into national law.

In addition to the measures dealing with delegation, risk management and the handling of actual or potential conflicts of interest, the legislation also allows sub-funds of a SIF umbrella structure to invest in other compartments of the same structure.

It also requires funds to be authorised by the CSSF before they can be launched, abolishing a provision of the 2007 law that allowed promoters up to a month after the launch of a fund to submit it to the regulator for approval. For further details of the new law, please see our article of March 9 entitled Luxembourg adopts AIFMD-ready amended SIF legislation which can be found by clicking on the following link http://www.cs-avocats.lu/legal-news/investment_management/luxembourg-adopts-aifmdready-amended-sif-legislation/. 


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