On 21 July 2021, the law transposing Directive (UE) 2019/1160 with regard to cross-border distribution of collective investment undertakings (the “CBD”) and amending:
- the law of 17 December 2010 regarding undertakings for collective investment (the “UCI Law”) and
- the law of 12 July 2013 related to alternative investment fund managers (the “AIFM Law”)
(the “Law”), was published in the Official Gazette.
The aim of the Law was to transpose the provisions of the CBD which had to be passed into national laws no later than 1st August 2021. As a consequence of the adoption of the Law the Commission de Surveillance du Secteur Financier (“CSSF”) amended its regulatory framework in relation to marketing notifications.
The Law amends the UCI Law and the AIFM Law by incorporating the relevant provisions of the CBD.
The Law introduces:
- new rules governing the de-notification procedure;
- new information that must be provided in the notification letter further to the end of the obligation to appoint local agents in host Member States and the new obligation for AIFs marketed to retail investors to make arrangements in relation to subscriptions, redemptions and communication of certain information; and
- new timing for the CSSF to inform the manager, or UCITS directly in case they have not appointed a management company, that it may not proceed with the contemplated change(s) that it proposes to make to its marketing notification.
A definition of “pre-marketing” is also introduced in the AIFM Law along with the new regime governing this activity.
The Luxembourg government took the opportunity of the Law to clarify the accounting rules that AIFs structured under the form of a special limited partnership can apply. It is specifically provided that such AIFs may avail of any third country GAAP which have been deemed equivalent pursuant to Commission decision of 12 December 2008.
It is worth noting that in each law, the provisions of the CBD are incorporated by replicating them in extenso. The CSSF has also amended its regulatory framework regarding marketing notifications.
The new CSSF regulatory framework
On 28 July 2021, the CSSF published CSSF Circular 21/778 to update the Circular 11/509 in accordance with the Directive EU 2019/1160 (the “Circular”). Further details on the Circular can be found here.
The CSSF also created a new FAQ CBDF – Notification procedures (the “FAQ”) on 30 July 2021. The FAQ, which has already been updated once, aims to highlight the main changes which have been introduced by the CBD and to provide clarifications as to the procedures to be followed in relation to marketing notifications. For UCITS it mainly summarises the content of the Circular with additional guidance. For AIFMs, the FAQ provides information in relation to the procedure to be followed to notify the CSSF of pre-marketing activities, de-notification and on the information to be included in the marketing notification for AIFs marketed to retail investors. A new template de-notification letter is also now available.
The rules regarding pre-marketing by AIFMs have been described in further details on the new CSSF web page: Pre-marketing by AIFMs (the “Webpage”). The Webpage provides information as to the procedure applicable to Luxembourg AIFMs, EU AIFMs and non-EU AIFMs, clarifying that the same procedure as the one applicable to Luxembourg AIFMs apply to them. Two different templates of pre-marketing notification letter are now available and shall be used in the context of notifying the CSSF of pre-marketing.