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ARTICLE · 17 DECEMBER 2012

Guaranteed Funds In Luxembourg - The Prudential Regime In A Nutshell

ELVINGER HOSS PRUSSEN, société anonyme
Explore more from ELVINGER HOSS PRUSSEN, société anonyme

The approach taken by the CSSF is a good example of how the Luxembourg supervisory authority has been capable of combining a flexible approach towards innovative products, whilst ensuring a high level of supervision and investor protection.

LuxembourgFinance and Banking

Authors: Michel Mengal and Jérôme Wigny1

INTRODUCTION - BASIC CONCEPTS, A FEW FIGURES & A BIT OF HISTORY

1. Generalities - As from the early 1990s, the CSSF2 has approved the establishment of Guaranteed Funds3 in Luxembourg and developed a body of mainly unpublished prudential rules which any fund should comply with in order to name or claim itself as "guaranteed" or to suggest in any way that it is offering or securing some kind of Guarantee4 to investors. The purpose of this paper is to summarise and provide a few insights into this prudential regime, as well as to comment on it where appropriate. This paper expresses the views and is mainly based on the past daily practice of our firm, but does not purport to expose exhaustively the different types of Guarantees or Guaranteed Funds in existence nor how the latter may be operated.

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