The RAIF Regime - Update January 2019

Luxembourg's CSSF imposed a €56,000 fine on Stonehage Fleming Luxembourg S.A. for multiple compliance failures, including significant delays in processing sanctions screening alerts and implementing changes to screening lists. At the time of inspection, hundreds of alerts had been treated with substantial delays and 42 alerts remained completely unnoticed by the financial services provider.

The formal process of implementation of Directive (EU) 2024/1619 amending Directive 2013/36/EU ("CRD VI") began on 6 October 2025 with the publication of the bill of law n°8627 ("Bill") and its submission to Parliament.

Two years on from the entry into force of Directive (EU) 2024/927, commonly referred to as AIFMD II, the 16 April 2026 transposition deadline has passed, and the state of play across the EU is best described as uneven, with compliance posture increasingly dependent on where an AIFM is authorised. However, Luxembourg, which hosts the largest shares of EU AIFs within the Union, transposed the Directive without material gold-plating.

On 29 August 2024, Luxembourg's CSSF issued Circular 24/860, clarifying governance, risk management, and audit committee requirements for credit institutions, updating key provisions of Circular 12/552.

The Luxembourg law of March 3, 2026 transposed the AIFMD II Directive into national law, introducing significant changes to the regulatory framework governing alternative investment funds. This article examines the practical implications for financing transactions involving Luxembourg AIFs, analyzing how the new rules on loan origination, leverage caps, concentration limits, and enhanced disclosure requirements affect both lenders and borrowers in structured finance arrangements.

Luxembourg's partnership limited by shares (SCA) offers private fund managers a compelling corporate alternative to the special limited partnership structure, particularly for EU family offices and high-net-worth individuals. When combined with the RAIF regime, this vehicle achieves tax neutrality while maintaining the corporate governance framework that certain investors prefer. The SCA-RAIF structure addresses key legal and tax considerations while providing flexibility for secondary strategies, fund-of-f

Luxembourg has introduced a landmark legislative reform allowing unregulated alternative investment fund (AIF) limited partnerships to adopt multi-compartment structures. This development enables fund sponsors to consolidate multiple investment strategies, investor classes, and fund-level structures within a single limited partnership, significantly reducing complexity and administrative burden while maintaining creditor protection and investor segregation.

Semi-liquid alternative investment funds face inherent tensions between illiquid assets and investor liquidity demands, requiring sophisticated redemption management tools. Under AIFMD II, EU-authorized private fund managers must implement pre-determined liquidity management tools, but not all redemption restrictions qualify equally.

The draft legislation transposing the European Union’s Alternative Investment Fund Managers Directive into Luxembourg law was submitted to the grand duchy’s Chamber of Deputies by finance minister Luc Frieden on August 24.

On 30 July 2026, Bill of Law n° 8814 (“Bill of Law”) was introduced to the Luxembourg Parliament with a view to amending the law of 12 July 2013 on alternative investment fund managers, as amended (“AIFM Law”).