Investments

Solidly established as a global leader in the investment funds world, the Grand Duchy of Luxembourg has in the beginning of the year 2008 been seeing an increasing number of hedge funds, and especially funds of real estate funds. Luxembourg hedge funds are subject to the same legal and regulatory requirements applicable to other funds and thereby benefit both from the high degree of flexibility available in the setting-up period as well as in day-to-day management, and from the strong... Read More

On 15 October 2008, the Luxembourg Parliament amended the existing SICAR law of 15 June 2004 with the aim to make the SICAR regime more attractive to private equity and venture capital investors.

The main amendments that have been voted are briefly set out hereunder:

The new SICAR law has introduced the possibility to create multiple compartments. The principle of compartment segregation already well known for SIFs, securitization... Read More

In a Circular issued on 5 September 2008, the CSSF clarified the interaction between the prime broker and the custodian of a SIF. In Luxembourg, the prime broker must be a financial institution subject to the control of a supervisory authority of a State with a supervisory regime recognised to be equivalent to that provided by EU legislation. Prime brokers are essential to SIFs that implement a hedge fund strategy or that make use of derivatives. By setting up four guidelines, the Circul... Read More

A new regime applicable to securities lending operations performed by UCITS - and, in principle, by other UCIs subject to the 2002 Law – was introduced by CSSF Circular 08/356 released on 4 June 2008. The main point of this new regime is, by reforming the previous one (referred to in the Commission Directive 2007/16/EC, and the corresponding CESR guidelines) set out in 1991 (by CSSF Circular 91/75) to take into account the fast growing number of securities lending transactions... Read More

In its Circular 07/308, the CSSF dwelt on the required procedure concerning the use of financial derivative instruments and the management of financial risks by UCITS.
A crucial element enabling the CSSF to play its supervisory role is obviously the information that UCITS need to communicate to the CSSF, and especially towards its risk management process.
The CSSF recently re-affirmed the importance of such elements and set out a list of them in its annual report, list which may... Read More

Undertakings for Collective Investment in Transferable Securities (UCITS III) were introduced by the law of 20 December 2002 (the “2002 Law”), and benefit from a European Passport enabling them to be freely marketable throughout the EU countries. However, unsatisfactory elements relating to the current state of the Law paved the way to discussions about a possible ‘mutation’ from UCITS III to UCITS IV.

Those include, inter alia, details in the cross border... Read More