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ARTICLE · 10 NOVEMBER 2021

New CSSF Administrative Practice Concerning The Holding Of Ancillary Liquid Assets By UCITS

Arendt & Medernach
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On 3 November 2021, the CSSF published an updated version of its FAQ on the Law of 17 December 2010 on undertakings for collective investment (the "FAQ on the Law of 2010"), and an updated version...

LuxembourgFinance and Banking
Michèle Eisenhuth
Michèle Eisenhuth
Géraldine Léonard
Géraldine Léonard
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On 3 November 2021, the CSSF published an updated version of its FAQ on the Law of 17 December 2010 on undertakings for collective investment (the "FAQ on the Law of 2010"), and an updated version of its FAQ on Regulation (EU) 2017/1131 on money market funds (the "FAQ on the MMF Regulation"). These updates aim to clarify the circumstances under which, and the extent to which, UCITS are permitted to hold ancillary liquid assets.

Through its FAQ on the Law of 2010, the CSSF gave the following clarifications:

  • A UCITS must limit ancillary liquid assets as referred to in article 41(2)(b) of the Law of 2010 to bank deposits at sight, such as cash held in current accounts with a bank accessible at any time. The ancillary liquid assets held are limited to 20% of the UCITS' net assets. The 20 % limit may only be temporarily breached where exceptionally unfavourable market conditions so require and where such breach is justified by the interests of investors.

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