On 23 August 2018, the CSSF issued a Circular 18/698 relating to the authorisation and organisation of investment fund managers incorporated under Luxembourg law, repealing and replacing CSSF Circular 12/456.

The circular applies to UCITS management companies authorised under Chapter 15 of Luxembourg’s investment fund legislation of 2010, management companies authorised under Chapter 16 or branches of management companies authorised under Chapter 17 of the 2010 law, self-managed UCITS, alternative investment fund managers authorised under chapter 2 of the AIFMD implementation legislation of July 12, 2013, and self-managed alternative investment funds under Article 4(1)(b) of the AIFMD law. However, it does not apply to sub-threshold registered alternative investment fund managers using the exemption under Article 3(2) of the 2013 law.

The circular seeks to standardise and codify the practical approach adopted by the CSSF up to now in its supervision process as well as to reflect the new legislation introduced in the years since the regulator’s previous circular in this regard.

The repealed Circular 12/456 was not been directly applicable, for instance, to alternative investment fund managers, even though the CSSF required AIFMs to comply with its provisions. Publication of the new circular has clarified this situation and established a unified and comprehensive set of rules for all market participants within the scope of the circular.

Circular 18/698 sets out the conditions necessary to obtain and maintain the authorisation of the investment fund manager relating to aspects including its ownership, own funds, governance, central administration, internal organisation, external audit and exchange of the information between relevant parties.

It additionally sets out specific conditions applicable to investment fund managers providing accessory services such as discretionary portfolio management or providing services via EU passporting arrangements.

The provisions of the new circular became applicable from the date of publication of the circular and all investment fund managers in scope should adapt their operating models accordingly without delay. We are available to discuss any questions you might have in this regard.

CSSF Circular 18/698 can be accessed here.