CSSF Publishes Updated FAQ On AIFM

On July 18^th 2014 the Commission de Surveillance du Secteur Financier ("CSSF") published an updated version of its frequently asked questions ("Updated FAQ") concerning the Luxembourg law of July 12^th 2013 on alternative investment fund managers ("AIFM Law") as well as the Commission Delegated Regulation (EU) No 231/ 2013 of December 19^th 2012.

The amended question relates to reporting by non-EU AIFMs marketing AIFs in Luxembourg. The Updated FAQ clarifies that:

• a non-EU AIFM will have to report to the CSSF only in the case where it is marketing to professional investors in Luxembourg;
• the information to be reported should only cover the data for those AIFs that are marketed in Luxembourg;
• the date of the information form provided to the CSSF prior to the commencement of marketing (see below) is considered as the start date for the reporting period; and
• the reporting frequency and periods for non EU-AIFMs are the same as those applicable to Luxembourg AIFMs.

The first new question (Q 17.) deals with initial capital, own funds requirements and coverage of potential professional liability risks applicable to AIFMs. The Updated FAQ sets out the exact initial capital and own funds required for either a chapter 15 Manco with a licence as AIFM or an external  AIFM which does not hold a licence as a Chapter 15 Manco (i.e. Chapter 16 Mancos or other Luxembourg based AIFMs).

The second question (Q 18.) relates to the marketing of AIFs to professional investors in Luxembourg without a passport by non-EU AIFMs on the basis of article 45 of the AIFM Law.  The CSSF confirmed that non-EU AIFMs are allowed to do so provided that the conditions of article 45 of the AIFM law are met, but such non-EU AIFMs have to:

1. inform the CSSF prior to any marketing activity using the information form that has been made available on the CSSF's website;
2. communicate to the CSSF the end-date of marketing activity in Luxembourg; and
3. report to the CSSF periodically in accordance with article 24 of the AIFM Directive.

March 2014

The Commission de Surveillance du Secteur Financier ("CSSF") published first on February 20^th 2014, then on March 17^th 2014, updated versions of its frequently asked questions ("FAQ") concerning the Luxembourg law of July 12^th 2013 on alternative investment fund managers ("AIFM Law") as well as the Commision Delegated Regulation (EU) No 231/ 2013 of December 19^th 2012.

Two new questions have been added to the FAQ updated on February 20^th 2014. 

Valuation of the AIF's assets

The first one concerns the question of valuation of the AIF's assets. It is stated that the valuation function can be performed either by the AIFM itself or by an external valuer, subject to the fulfillment of the conditions set forth in article 17(4)(a) of the AIFM Law. When the valuation function is made by an external valuer, the latter can be either (i) the depositary of the AIF provided that the requirements of article 17(4) paragraph 2 of the AIFM Law are met or the (ii) administrator of the AIF if it fulfills the requirements under articles 17(4) and 17(5) of the AIFM Law. The appointment of any external valuer has to be formalised by written contract, which clearly states that it is the external valuer within the meaning of article 14(4)(a) of the AIFM Law and sets out its tasks.

Transactions costs for AIFs

The second question deals with transaction costs for AIFs established under Part II of the law of December 17^th 2010 relating to undertakings for collective investment ("UCITS Law"). In particular, the issue was to determine if AIFs established under Part II of the UCITS Law must disclose the transaction costs in their periodical financial reports. The CSSF answered this issue in the affirmative.   

The update of the FAQ published on March 17^th 2014 relates to section 14 and in particular to the question concerning the period from which authorised AIFMs or registered AIFMs, which have been authorised or registered before July 23^rd 2014, have to file their first reports with the CSSF.

January 2014

On January 10^th 2014 the CSSF published an updated version of its FAQ concerning the Luxembourg Law on AIFM (“AIFM Law”) as well as the Commission Delegated Regulation (EU) No 231/2013 of December 19^th 2012.

The definition section has been updated and now the terms “authorised AIFM”, “Marketing”, “Professional Investor” and “Registered AIFM” have, among others been clarified.

In addition, two new questions relating to AIFs structured as FCPs or as limited partnerships have been added to the FAQ. Such questions (i) clarify that FCPs are always to be considered as externally managed, (ii) provide guidance as to how to determine whether limited partnerships are to be considered as internally or externally managed and (iii) clarify when the external manager is responsible for seeking the relevant authorisation or registration for the AIF.

The section relating to the entry into force of the provisions of the AIFM Law has also been updated to invite all entities which need to be authorised pursuant to the AIFM Law to submit to the CSSF, as soon as possible, and by April 1^st 2014 at the latest, their application file.

The updated FAQ is available at: http://www.cssf.lu/aifm