The Luxembourg Commission de Surveillance du Secteur Financier (the "CSSF") published on 16 May 2022 Circular 22/811 (the "Circular") on the authorization and organization of entities acting as UCI Administrator.
The Circular replaces Chapter D of Circular IML 91/175 and provides detailed guidance on UCI administration activities and clarifies, inter alia, delegation models.
On 21 June 2022, the CSSF published its Q&A on authorisation and organisation of entities acting as UCI Administrator (the "CSSF Q&A") covering a number of key aspects of the Circular with the objective of bringing further clarity on the supervisory expectations of the competent authority.
An updated version of the CSSF Q&A has been published on 2 December 2022 to clarify the following points:
- The Circular only applies to the entities listed under point 2.1 of the Circular which perform, in Luxembourg, all or any of the three functions as defined under point 10 of the Circular to UCI(s). This means that the Circular doesn’t apply to any other entity, which is not listed under point 2.1 of the Circular, and which is permitted to provide one or more UCI administration functions (for instance, when the administration of an unregulated UCI established in Luxembourg is performed by the UCI itself or by its registered AIFM).
- The Circular does not apply to UCI or Investment Fund Managers ("IFM") having wholly delegated the UCI administration functions. However, the sectorial legislation requires that the UCI or the IFM monitor any delegate and the Circular defines information exchange and cooperation requirements in this context.
- Only one service provider may be designated and is responsible for a specific UCI administration function (there are 3 distinct administration functions listed in the Circular) but it does not exclude the possibility to appoint a different service provider for each of the three functions.
- The UCI Administrator is responsible for the function(s) for which it has been appointed. However, this does not mean that such UCI Administrator needs to perform all the tasks related to a given administration function itself. Both delegation and support from third parties are permissible under the conditions, and within the limits, set out in the Circular and other applicable sectorial legislations.