The legislation transposing the European Union’s Alternative Investment Fund Managers Directive into Luxembourg law, approved by the grand duchy’s Chamber of Deputies last Wednesday, July 10, has come into force following its receipt of royal assent last Friday and publication on July 15 in the grand duchy’s official gazette, the Mémorial.
The provisions of the legislation, henceforth known as the law of July 12, 2013 on alternative investment fund managers, will apply from July 22, the deadline for EU member states to adopt the directive into their national law.
However, Luxembourg-based fund managers will enjoy a transition period of up to one year to comply fully with the law’s conditions. On June 18 the Luxembourg regulator, the CSSF, issued a Q&A document outlining how the transitional provisions will apply.
The legislation also introduces into national law a new regime to be known as the société en commandite special, or special limited partnership, designed to appeal to managers of private equity, venture capital and real estate funds and their investors. It also offers an attractive regime for the taxation of carried interest.
The council of state granted a dispensation from the requirement for the legislation to undergo a second vote in the Chamber of Deputies, despite its reservations about bringing forward its entry into force to the day of publication in the Mémorial, rather than on the first day of the month following its publication, as the legislation originally provided.
The amendment was made in parliament to ensure that Luxembourg would be able to meet the July 22 deadline. It now appears that no more than five or six other EU countries will pass the legislation on time.
The European Securities and Markets Authority is expected to provide guidance on the legal position regarding the marketing of alternative investment funds in EU member states that have not yet adopted the directive.