The draft legislation transposing the European Union’s Alternative Investment Fund Managers Directive into Luxembourg law was approved by the grand duchy’s Chamber of Deputies on the morning of Wednesday, July 10.
With the deadline of July 22 for member states to adopt the directive into national law approaching fast, Luxembourg is now set to become one of a minority of EU countries to implement the AIFM Directive on time.
The government has requested a dispensation from proceeding with the optional second vote on the legislation in the Chamber of Deputies. According to the expected timetable, the legislation will receive the assent of Grand Duke Henri and be published in the official gazette, the Mémorial, on July 17, after which it will become law.
Bill of law no. 6471 not only incorporates the directive but introduces into national law a new regime to be known as the société en commandite special, or special limited partnership. It also provides greater clarification on the taxation of carried interest.
It also contains assorted measures revising and updating various elements of Luxembourg’s investment fund regulation in line with the AIFM Directive provisions, notably the 2010 legislation adopting the Ucits IV directive into national law. In total 14 existing laws will be amended, including the legislation governing Specialised Investment Funds (SIFs) and Risk Capital Investment Companies (Sicars).
The timing of the Chamber of Deputies is critical since the governing coalition is expected to resign over an unrelated issue, resulting in the dissolution of parliament and the calling of an early general election probably in October.
The original draft of the law provided that it would come into force on the first day of the month following its publication of the Mémorial, but it was amended on June 28 to change the date of entry into force to the day of publication, to ensure that the July 22 deadline for transposition of the deadline would not be missed.
The approval of the legislation means that Luxembourg will join Ireland, Malta, European Economic Area member Liechtenstein and possibly a few others in meeting the deadline. The UK and France are also close to finalising the legislation; Germany has done so but a critical related tax law has been held up by deadlock between the Berlin government and federal states.