Circular CSSF 18/697 is a CSSF circular, published 23 August 2018. Subject: Organisational arrangements applicable to fund depositaries which are not subject to Part I of the Law of 17 December 2010 relating to undertakings for collective investment, and, where appropriate, to their branches; Amendment to Circular CSSF 16/644 regarding the provisions applicable to credit institutions acting as UCITS depositary subject to Part I of the 2010 Law, where appropriate, represented by their management company; and Amendment to Circular IML 91/75 (as amended by Circular CSSF 05/177) regarding the revision and recast of the rules to which Luxembourg undertakings governed by the Law of 30 March 1988 on undertakings for collective investment (“UCIs”) are subject.
\nLegal basis: Law of 5 April 1993 on the financial sector, Law of 17 December 2010 on undertakings for collective investment, Law of 30 March 1988 on undertakings for collective investment.
\nRelevant for: Credit institutions, Investment firms, Part II UCIs, SICARs, SIFs, Specialised PFS.
\nKeywords: Authorisation, Depositary.
\nAmends Circular CSSF 16/644.
\nIn case of discrepancies between the French and the English text, the French text shall prevail.
\nLuxembourg, 23 August 2018 To all credit institutions, investment firms, professional depositaries of assets other than financial instruments within the meaning of the Law of 5 April 1993 on the financial sector, as amended, established in Luxembourg, and Luxembourg branches of credit institutions and investment firms originating from a Member State of the European Union or a third country acting, or planning to request an authorisation to act, as fund depositary, that are not subject to Part I of the Law of 17 December 2010.
\nCIRCULAR CSSF 18/697 Re:
\nOrganisational arrangements applicable to fund depositaries which are not subject to Part I of the Law of 17 December 2010 relating to undertakings for collective investment, and, where appropriate, to their branches; Amendment to Circular CSSF 16/644 regarding the provisions applicable to credit institutions acting as UCITS depositary subject to Part I of the 2010 Law, where appropriate, represented by their management company; and Amendment to Circular IML 91/75 (as amended by Circular CSSF 05/177) regarding the revision and recast of the rules to which Luxembourg undertakings governed by the Law of 30 March 1988 on undertakings for collective investment (“UCIs”) are subject.
\nLadies and Gentlemen, This circular should be placed in the context of the Law of 12 July 2013 on alternative investment fund managers (the “2013 Law”) and Commission Delegated Regulation (EU) No 231/2013 with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision (“Delegated Regulation 231/2013”). These texts provide for a set of requirements on the duties of the depositaries regarding the safekeeping of assets, oversight duties as well as the monitoring of cash flows and they have introduced a liability regime of depositaries towards alternative investment funds and their investors.
\nThis circular clarifies or provides further details on certain aspects of the 2013 Law and/or Delegated Regulation 231/2013, and, to a certain extent, the SIF Law and/or the SICAR Law, in the Luxembourg context, by implementing principles of sound governance and by specifying the CSSF requirements on internal organisation and good practice of Luxembourg entities performing depositary duties for the following vehicles: - AIFs managed by an IFM, - undertakings for collective investment established in Luxembourg that are subject to Part II of the 2010 Law (“UCIs Part II”), managed by an IFM authorised under Chapter 2 of the 2013 Law or Chapter 2 of the AIFMD and which, in their offering documents, explicitly refer to the prohibition of the marketing of fund shares or units to retail investors established in Luxembourg, - UCIs Part II whose managers benefit from and use the exemptions provided for in Article 3 of the 2013 Law and which, in their offering documents, explicitly refer to the prohibition of the marketing of fund shares or units to retail investors established in Luxembourg, and - where relevant, specialised investment funds (“SIFs”) and investment companies in risk capital (“SICARs”) which do not qualify as AIFs, SIFs and SICARs which qualify as AIFs and whose manager benefits from and uses the exemptions provided for in Article 3 of the 2013 Law. In this circular, any reference to these vehicles is, where appropriate and depending on the circumstances, to be understood as a reference to the vehicle and/or its IFM.
\nThe text above is the opening of the document; the PDF carries the whole.
\nDocument page, PDF. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.
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