On 13th February 2007, the Luxembourg parliament adopted a law replacing the 1991 law on UCIs (undertakings of collective investment) dedicated to institutional investors.
The law provides a more flexible framework for specialized investment funds. We set out hereunder the most important changes:

• no need to be set up by an institutional promoter;
• the minimum share capital of 1,25 million Euro must only be reached within a period of 12 months following the approval by the CSSF (and not 6 months as prior to the law);
• enlargement of the scope of investors: not only institutional investors but all sophisticated investors may invest in SIFs. A sophisticated investor includes institutional investor, professional investor and also any private individual who(a) confirms formally that he adheres to the status of sophisticated investor; AND
  (b) (i) invests a minimum of 125,000 Euro or (ii) has obtained a certificate of a credit institution or another professional of the financial sector certifying his experience and his knowledge in appraising the contemplated investments;
• SIFs can start their activity before the CSSF has granted approval, provided the request for authorization is filed with the CSSF within one month after the SIFs creation;
• Assets should be valued at fair value but it can be determined in the management regulations or the by-laws of the SIF;
• No detailed investment restrictions (risk spreading rules);
• No need to issue a prospectus;
• No requirement to publish a semi-annual report.

The new law provides a more flexible framework for the establishment of Luxembourg funds and more in particular allows private individuals to invest in funds.