There’s 2 types of funds in the country:
- regulated ones (overseen by the CSSF & subject to UCI, SICAR & SIF);
- unregulated ones (subject to RAIF insofar as they qualify as AIF within the meaning of AIFM).
Those seeking to undertake financial activities in Luxembourg should keep in mind that fund managers are subject to the UCI & AIFM Laws.
Luxembourg: Fund Management Regulation
Please note that fund management is a regulated activity. The responsibility to deal with it is vested in:
- AIF managers.
- CSSF-authorized administrative agents acting pursuant to the FSA.
Setting up a regulated fund in Luxembourg requires submitting an application to the CSSF. If all the required documents are provided, the CSSF may register a fund & issue a visa-stamped proposal document.
The CSSF is charged with overseeing regulated funds on an ongoing basis. Hence, making any changes to regulated funds’ management documentation requires getting prior approval from the CSSF. Establishing an unregulated fund in Luxembourg doesn’t require getting prior approval from the CSSF. Once an unregulated fund is established, its manager is to inform the CSSF of their appointment so they can obtain prior authorization.
Transfering management of a regulated fund to managers from another EU country requires getting prior approval from the CSSF as well.
Luxembourg: Acquisition of Funds’ Shares
Purchasing a block of shares in a fund in Luxembourg requires getting permission. The CSSF must also be informed of the stakeholders owning a qualifying holding (directly or indirectly) & the amount of such ownership.
When evaluating an application, the following criteria are taken into consideration:
- fund managers’ financial status;
- fund managers’ expertise (especially when it comes to setting up a fund in Luxembourg);
- adherence to the regulator’s requirements;
- compliance with AML regulations.
Please note that fund managers can be physical persons & legal entities.
Considering establishing a fund in Luxembourg? Need advice on regulation of funds in Luxembourg? Looking to start a business in the EU? Why not contact IQ Decision UK?