On 18 October 2022, the CSSF published a clarification regarding the eligible entities for opening cash accounts concerning alternative investment funds (“AIF”).

The CSSF states that, based on its observations, some AIFs, particularly those having appointed as their single depositary a professional depositary of assets other than financial instruments (the “PDAOFI”), as defined in article 26-1 of the Law of 5 April 1993 on the financial sector, as amended, use or intend to use for the purpose of holding their cash accounts, the services of :

  • An electronic money institution (the “EMI”) within the meaning of the Law of 10 November 2009 on payment services (the “Payment Services Law”). EMI is defined as a legal person that has been granted authorisation by the competent authorities of a Member State under Title II of Directive 2009/110/EC to issue electronic money. In Luxembourg, this refers to any legal person that has been granted authorisation to issue electronic money under the Payment Services Law; or
  • a payment institution (the “PI”) within the meaning of the Payment Services Law, defined as legal persons or persons that have been granted authorisation following Articles 7 and 22 of the Payment Services Law to provide and execute payment services.

As a consequence of the preceding, the CSSF reminds that all cash of an AIF has to be booked in cash accounts opened (i) in the name of the AIF, (ii) in the name of their alternative investment fund manager (the “AIFM”) acting on behalf of the AIF, or (iii) in the name of the depositary acting on behalf of the AIF with an entity as specified under Article 19(7) of the Law of 12 July 2013 (the “AIFM Law”). In particular, as per point 18 of circular 18/697, a PDAOIF acting as depositary must ensure the appointment of one or more entities with which all cash of the AIF shall be booked in cash accounts.

Article 19(7) of the AIFM Law, Article 86(a) of the Commission Delegated Regulation (EU) 231/2013 and article 18(1) (a), (b) and (c) of the Directive 2006/73/EC provide that the only eligible entities (the “Eligible Entities”) qualified for the holding of cash accounts for AIF operation’s purpose are:

  1. a central bank ;
  2. a credit institution authorised per Directive 2000/12/EC; and
  3. a third country-authorised bank.

Therefore, AIFs for which an EMI or PI has been appointed to hold a cash account shall, as soon as possible but no later than 30 June 2023 :

  1. appoint a depositary within the meaning of Article 19(3)(i) of the AIFM Law; and
  2. appoint an Eligible Entity concerning such AIF’s cash accounts.

The CSSF forbids the set-up of new sub-funds of AIFs for which an Eligible Entity does not currently hold cash accounts. Any new AIF must ensure that an Eligible Entity will hold the cash accounts.

Please feel free to contact our investment management team concerning the completion of the qualification of your depositary.