On 30 November 2023, the CSSF updated its FAQ concerning the UCI Law by adding questions 1.14 and 1.15 on the holding of ancillary liquid assets by feeder UCITS clarifying that the strict interpretation adopted in the FAQ concerning the holding of ancillary liquid assets by UCITS (which is limited to bank deposits at sight) does not apply to feeder UCITS.
For feeder UCITS, the concept of ancillary liquid assets that may be held by feeder UCITS (alongside investments in the master) is to be interpreted more broadly and may also include, highly liquid assets such as deposits with a credit institution, money market instruments and money market funds.
As a feeder UCITS must invest at least 85% of its net assets in the master UCITS, the limit on ancillary liquid assets held by a feeder UCITS is 15% of its net assets, in accordance with Article 77(2) of the UCI Law (and not 20% as for non-feeder UCITS).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.