ARTICLE · 05 APRIL 2022

Ukraine Crisis - CSSF FAQ On The Application Of LMTs By UCITS

ELVINGER HOSS PRUSSEN, société anonyme

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On 31 March 2022, the CSSF provided guidance with respect to the challenges faced by investment funds holding Russian and Belarussian assets that have become illiquid as a consequence of the Ukraine crisis...

LuxembourgFinance and Banking

Olivia Moessner

Benjamin Rossignon

On 31 March 2022, the CSSF provided guidance with respect to the challenges faced by investment funds holding Russian and Belarussian assets that have become illiquid as a consequence of the Ukraine crisis as well as due to the restrictive measures taken by the EU and other countries in this context, by publishing a FAQ on liquidity management tools ("LMTs") that may be applied by investment funds. The FAQ addresses more specifically the segregation of assets or creation of so-called "side-pockets".

Which funds are in scope of the FAQ?

The FAQ mainly relates to the application of possible LMTs by UCITS but the CSSF indicates that theses LMTs might also be applied by AIFs. The CSSF further considers that a distinction has to be made to determine the relevant available LMTs between (i) funds having a limited exposure to illiquid assets, which allows the funds to continue their operations and (ii) funds having a higher exposure to such illiquid assets, which may

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