Topic Update Date Firm Type

Brexit - End of the Transitional Period

EU laws and regulations ceased to apply in the UK and to UK entities as of December 31, 2020. Services provided by UK entities in Luxembourg based on their passporting rights under applicable EU legislation are lost as of January 1, 2021. On December 7, 2020, the CSSF published a press release to remind that the lapse of passporting rights will impact the following:

  • The management of Luxembourg funds on a cross-border basis by UK entities
  • The cross-border distribution of funds into Luxembourg (marketing in Luxembourg to retail and/or professional investors)
  • The delegation of investment/portfolio management and/or risk management activities to undertakings in the UK
  • Compliance with investment policy and eligibility issues
  • Staff secondments

For more information click here.

January 1, 2021

Investment fund, fund service provider business regulated, investment fund managers

Luxembourg 2021 Budget Law

On December 17, 2020, the Luxembourg Parliament approved the 2021 Budget law. The law includes the introduction of a new annual real estate tax of 20% for the following Luxembourg investment funds:

  • Alternative investment funds falling under part II of the amended law of December 17, 2010 concerning undertakings for collective investment (Law of December 17, 2010);
  • Specialized investment funds referred to in the amended law of February 13, 2007 (SIF Law); and
  • Reserved alternative investment funds referred to in Article 1 of the amended law of July 23, 2016 (RAIF Law).

The new tax would not apply to:

  • Foreign investment funds;
  • Luxembourg tax-transparent limited partnerships (SCS and SCSp);
  • Luxembourg fond commun de placement (FCP); and
  • Investment company in risk capital (SICAR).

Another key change is the reduction of the subscription tax rate for Luxembourg investment funds governed by the law of December 17, 2010 investing in sustainable investments. Today, the subscription tax amounts to 0.05 % of net assets under management. Under the draft law, the subscription tax would vary from 0.01% to 0.04% depending on the proportion of sustainable investments.

January 1, 2021

Investment fund, fund service provider business regulated, investment fund managers

AIFMD II

On October 22, 2020, and following the provision of article 69 of the AIFM Directive, the European Commission launched a public consultation on the review of the AIFM Directive to gather views from market participants such as AIFMs, AIF distributors, industry representatives, investors and investor protection associations on potential changes to the AIFMD. Participants are invited to complete an online questionnaire covering, among others, the following topics:

  • Delegation
  • Depositaries
  • Marketing and passporting
  • Environmental, social and governance (ESG) factors and sustainability
  • Valuation

The public consultation ended on January 29, 2021 and feedback on the consultation is expected to be published on the European Commission website in Q3 2021.

January 29, 2021

Investment fund, fund service provider business regulated, investment fund managers

DAC 6

On March 21, 2020, the Luxembourg Parliament passed the law implementing the 6th Directive 2011/16/EU on Administrative Cooperation (“DAC6”). DAC6 introduced an automatic exchange of information in relation to cross-border arrangements.

Due to COVID-19, the Luxembourg Parliament voted on July 22, 2020 to defer the DAC6 reporting obligation by six months. Therefore, the newly DAC6 reporting deadlines are the following:

  • January 30, 2021: reportable cross-border arrangements occurring between July 1, 2020 and December 31, 2020 should be disclosed within 30 days from January 1, 2021 (application date of DAC6);
  • Reportable cross-border arrangements, occurring on/after January 1, 2021, should also be disclosed within a 30-day period.

Historical reportable cross-border arrangements (RCBAs) must be reported in Luxembourg to the Administration des contributions directes through the website www.MyGuichet.lu and are as follows:

  • The identification of intermediaries and relevant taxpayers (including their name, date and place of birth (in the case of an individual), residence for tax purposes, TIN and, where appropriate, the persons that are associated enterprises to the relevant taxpayer
  • The details of all relevant applicable hallmark(s)
  • The summary of the cross-border arrangement, including a summary of relevant business activities
  • The date on which the first step in implementing the reportable cross-border arrangement was/will be made
  • The details of the relevant national provisions
  • The value of the RCBA
  • The identification of the member state of the relevant taxpayer(s) and any other member states that are likely to be affected by the reportable cross-border arrangement
  • The identification of any other person in a member state likely to be affected by the RCBA, indicating which member states such person associated with

January 30, 2021

Investment fund, fund service provider business regulated, investment fund managers

Regulation (EU) 2019/2088 on Sustainability‐Related Disclosures in the Financial Services Sector

On November 27, 2019, the EU council adopted the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector, also referred to as Sustainable Finance Disclosure Regulation (SFDR).

On December 16, 2020, and to comply with SFDR, the CSSF implemented a fast track procedure to facilitate the submission of the revised prospectus/issuing documents for UCITS, SIFs and part II funds. To fast-track submission, a confirmation letter (available on the CSSF website) must be accompanied to the revised prospectus/issuing document.

Investment fund managers are reminded that:

  • The fast track procedure applies only to updates required under SFDR
  • Revised prospectus/issuing document must be submitted to the CSSF for visa stamp by no later than February 28, 2021

For more information click here.

By March 10, 2021, financial market participants and financial advisers must publish on their website the following information:

  • Sustainability risk policy (article 3)
  • Statement on due diligence policies with respect to the adverse sustainability impacts, taking account of their size, the nature and scale of their activities and the types of financial products they make available (article 4)
  • Alignment of remuneration policies consistent with the integration of sustainability risks (article 5)
  • Transparency in the investment objectives: promotion of environmental or social characteristics (article 8) or sustainable investments (article 9) or none of them

Except the alignment of the remuneration policies, the above information must be made available in the pre-contractual documents as well.

For more information click here.

February 8, 2021 + March 10, 2021

Investment fund, fund service provider business regulated, investment fund managers

Annual Survey Related to the Fight Against Money Laundering and Terrorist Financing

To monitor the ongoing assessment of money laundering and terrorist financing (ML/FT) risks within the financial sectors, the CSSF will invite the investment fund managers under its supervision to complete its annual online survey. The 2019 survey covered the following items:

  • The general information of investment fund managers, including the composition of the conduction officers, the compliance function and the UBO
  • The tasks performed as designated investment fund manager such as fund administration, transfer agency, portfolio management or risk management
  • The tasks performed by the investment fund manager by delegation such as fund administration, transfer agency, portfolio management or marketing
  • The domiciliation services
  • The investment fund manager ML/TF inherent risks including the number of investment fund initiators and the types and number of investment funds under management
  • The existence of branches/subsidiaries within the investment fund managers
  • The ongoing monitoring and cooperation with the authorities
  • The investment fund manager ML/TF mitigation effectiveness including the risk-based approach or anti-money laundering training for staff

Investment fund managers (preferably, the company’s compliance officer) are invited to submit their annual survey via the CSSF eDesk portal between February 15 and March 15, 2021.

For more information click here.

March 15, 2021

Investment fund managers

Law of July 10, 2020 Creating a Register of Fiduciaries and Trust

The law of July 10, 2020 creating a register of fiduciaries and trust transposes Article 31 of Directive (EU) 2015/849 as amended by the 5th Anti Money Laundering Directive (AMLD5).

Fiduciaries and trustees must obtain and maintain certain details on the beneficial owners of any fiduciary contracts and trusts. The information must be transmitted to the Administration de l’enregistrement, des domaines et de la TVA (AED) through the website MyGuichet.lu.

Scope:

  • Luxembourg fiduciary agreements and express trusts for which a fiduciary or a trustee is established or domiciled in the Grand Duchy of Luxembourg
  • Foreign fiduciary agreements and express trusts for which a fiduciary or a trustee is established or domiciled in the Grand Duchy of Luxembourg
  • Fiduciaries and express trusts for which the fiduciary or trustee is established in a third country, provided that the structure enters into a business relationship in Luxembourg with a professional subject to the Luxembourg anti-money laundering law of November 12, 2004, as amended, or acquires a property in Luxembourg.

Luxembourg had until March 13, 2021 to connect the register to a central platform to exchange information with other EU countries.

For more information click here.

March 31, 2021

Investment fund, fund service provider business regulated

Directive 2019/1160 Regarding Cross-Border Distribution of Collective Investment Undertakings Amending the UCITS and AIFM Directives

On July 12, 2019, the Directive 2019/1160 regarding cross-border distribution of collective investment undertakings, amending the UCITS and AIFM Directives (the CBDF Directive) and the directly binding Regulation 2019/1156 on facilitating cross-border distribution of collective investment undertakings amending the EuVECA, the EuSEF and the PRIIPs Regulations (the CBDF Regulation) were published in the Official Journal of the EU and entered into force on August 1, 2019.

The new regulation, together with amendments made to the UCITS and AIFM directives, focuses on the:

  • Introduction of a strict pre-marketing definitions (aligned with proposed changes in the AIFM Directive)
  • Transparency on the marketing requirements specific to each member state
  • Common rules for the discontinuation of marketing
  • A time limit given to competent authorities to verify notifications submitted by AIFMs
  • Transparency and proportionality of fees and charges considering supervisory tasks
  • Centralized database of all AIFMs, UCITS management companies, alternative investment funds and UCITS

The CBDF Directive must be transposed into national law within two years of the entry into force and a full implementation is required by August 2, 2021.

Further details are available our article from December 26, 2019: Harmonization Cross Border Marketing Investment Funds 

August 2, 2021

Investment fund, fund service provider business regulated, investment fund managers

Regulation (EU) 2019/1156 on Facilitating Cross-Border Distribution of Collective Investment Undertakings Amending the UCITS and AIFM Directives

On November 9, 2020, ESMA launched a public consultation on the draft guidelines on marketing communications under the Regulation (EU) 2019/1156 of June 20, 2019 on facilitating cross-border distribution of collective investment undertakings. The public consultation aims to gather feedback from market participants such as AIFMs, UCITS management companies, AIFs/UCITS distributors and investors (and investors associations) on the following topics:

  • Identifying marketing communications
  • Describing risks and rewards
  • The fair, clear and not misleading character of marketing communications (risks, costs, performances, ESG)

Final guidelines are expected to be published by August 2, 2021 at the latest.

For more information click here.

August 2, 2021

Investment fund, Fund service provider business regulated, investment fund managers

FATF Mutual Evaluation Report Discussions - Luxembourg

The forthcoming visit of the Financial Action Task Force (“FATF”) to Luxembourg was initially scheduled for October 2020. Due to the COVID-19 pandemic, the Luxembourg Ministry of Justice announced on April 14, 2020 that the discussion of the FATF report assessing Luxembourg’s performance on combating money laundering is postponed. As per the information available on the FATF website, the revised schedule as follow:

  • Possible onsite period: March/April 2021
  • Possible plenary discussion: October 2021

The last FATF mutual evaluation report on Luxembourg was conducted in 2010. In 2014, the FATF published a follow-up report analyzing the actions taken following the publication of the 2010 mutual evaluation report.

For more information click here.

October 2021

Investment fund, fund service provider business regulated, investment fund managers

Whistleblowers Directive

Following its adoption on October 23, 2019, EU member states have until December 17, 2021 to transpose the Whistleblower Directive (EU Directive 2019/1937 on the protection of persons who report breaches of Union law) into the national law.

In Luxembourg, several whistleblowing provisions are set out in:

  • The law of April 5, 1993 for the financial sector, as amended (applicable to credit institutions and professionals of the financial sector)
  • Circular CSSF 12/552 as amended (applicable to credit institutions and professionals of the financial sector)
  • Circular CSSF 18/698 (applicable to investment fund managers)

December 17, 2021

Investment fund, fund service provider business regulated, investment fund managers

Packaged Retail Investment and Insurance Products (PRIIPs)

Today all UCITS producing a Key Investor Information Document (“KIID”) as per the provisions set out in the UCITS Directive do not need to produce PRIIPs Key Information Document (“PRIIPS KID”). Starting January 1, 2022, a PRIIPs KID must be produced for all UCITS being sold to retail investors.

December 31, 2021

Investment fund, fund service provider business regulated, investment fund managers

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