Draft legislation was put to the Luxembourg Chamber of Deputies (Parliament) in August which proposes to amend the Law of 13th February 2007 on Specialised Investment Funds to implement UCITS IV and the AIFMD. Some of the material changes to the SIF regime:
- The requirement to translate fund articles from English into French will fall away.
- The ability to launch a SIF and apply for retrospective CSSF authorisation will be repealed.
- The individuals managing the fund's assets will have to be approved by the CSSF which must be notified of any changes to the portfolio managers.
- Generally, sub-managers exercising discretionary investment management powers will need to be prudentially managed.
- Funds will require the CSSF's approval for major changes to their offering documents including a change of name, creation of a new sub-fund or the replacement of the administrator, custodian or auditors.
- There are also additional rules on conflicts of interest and risk management.
Some of the proposals under the proposed law are positive steps for Luxembourg funds while others are indicative of how onshore unregulated funds will lose flexibility once AIFMD comes into force.