CSSF Clarifies Eligibility To Open Cash Accounts For Luxembourg AIFs

On 18 October 2022, the CSSF issued a press release¹ clarifying the types of entities that are eligible to open and hold the cash accounts of Luxembourg alternative investment funds ("AIFs").

Background

Article 19 of the law of 12 July 2013 on alternative investment fund managers², as amended (the "AIFM Law") requires a single depositary to be appointed to each AIF. Typically, this depositary must be a credit institution or an investment firm within the meaning of the law of 5 April 1993 on the financial sector³, as amended ("1993 Law").

However, for closed-ended AIFs that have no redemption rights exercisable during a period of five years from the date of the initial investments and which generally do not invest in assets that must be held in custody or generally invest in issuers or non-listed companies in order to potentially acquire control over such companies, the depositary may also be an entity that has the status of a 'professional depositary of assets