The CSSF circular 02/77 concerning the protection of investors in case of NAV calculation errors and correction of the consequences resulting from non-compliance with the investment rules applicable to undertakings for collective Investment (the “Circular”) was issued on 27 November 2002. On 7 July 2020, a Frequently Asked Questions (“FAQ”) was issued by the CSSF regarding the Circular which is applicable to UCITS and UCIs subject to part II of the Law of 17 December 2010 (the “2010 Law”) and outlines the principles to be applied by Specialized Investment Funds (SIFs).

On 18 February 2021, the CSSF updated its additional explanations (available here) regarding the notification form to be submitted in line with the Circular. The CSSF reiterates the scope of application of the notification which concerns :

  • UCITS and UCIs subject to the 2010 Law;
  • Specialised investments funds (SIFs) subject to the Law of 13 February 2007.

The revised notification form should be used with effect as of 18 February 2021 but notifications using the prior form will be accepted until 22 March 2021. The  amendments to the form concern inter alia the introduction of new drop-down menus (e.g. categorization of investment breaches) and of some date fields (in particular on corrective measures implemented at the level of the fund for avoiding the reoccurrence of similar incidents in the future) as well as the deletion of some data fields (e.g. share class specific information).

The CSSF underlined that the form should not be modified. In case of modification, the CSSF will not accept the notification. Additionally, in principle, the CSSF will not accept incomplete notifications (all the requested information as foreseen by the applicable data fields should be completed). The CSSF accepts, as an exception, that a partially filled notification form can be submitted to it in cases where it is not possible to submit a complete notification form within the timeline set out below. It will be considered as a pre-notification. But the complete notification form with all required information will have to be submitted in a next and final step. However the CSSF reminds that “The pre-notification option, explicitly foreseen in the notification form, can however only be used on an exceptional basis in duly justified cases where the calculations and compensation processes necessary to remediate and correct NAV calculation errors or non-compliances of investment rules are particularly complex and time-consuming and thus do not allow entities to provide the CSSF, within 6 to 8 weeks, with a complete notification form.”

Regarding the timing of submission of the notification, the CSSF requires a complete notification to be submitted, (i) in principle, within 4 to 8 weeks of the detection of the incident and (ii) for non-compliances with investment rules that do not involve time consuming calculations, in principle, within 4 to 6 weeks following their detection.

The new notification form is available here.

For any questions concerning the above, please do not hesitate to contact our investment management team.