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Luxembourg: Update on cross-border distribution of collective investment undertakings

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In brief

On 31 January 2022, the Commission de Surveillance du Secteur Financier (CSSF) issued a new Circular CSSF 22/795, to confirm in its capacity as competent authority, that it would apply the ESMA guidelines on marketing communications under Regulation (EU) 2019/1156 (“CBDF Regulation“), published on 2 August 2021 (“Guidelines“).

As a result, all Luxembourg investment fund managers that are in the scope of application of this Circular shall duly comply with the Guidelines, applicable from 2 February 2022.

Conveniently, the CSSF has also recently published updated summaries of national provisions governing the marketing requirements for alternative investment funds (AIFs) and updated summaries of national provisions governing the marketing requirements for undertakings for collective investment in transferable securities (UCITS).

  • Guidelines purposes

The Guidelines aim to establish common principles on the identification of marketing communications, the risks and rewards of purchasing units or shares of an AIF or a UCITS in an equally prominent manner, and the fair, clear and not-misleading character of marketing communications, taking into account their online aspects.

  • In-scope Luxembourg investment fund managers (IFMs)
    1. Management companies incorporated under Luxembourg law and subject to Chapter 15 of the law of 17 December 2010, relating to undertakings for collective investment (“2010 Law“)
    2. Management companies incorporated under Luxembourg law and subject to Article 125-2 of Chapter 16 of the 2010 Law
    3. Investment companies which did not designate a management company within the meaning of Article 27 of the 2010 Law
    4. Alternative investment fund managers authorized under Chapter 2 of the Law of 12 July 2013 on alternative investment fund managers (“2013 Law“)
    5. Internally managed AIFs within the meaning of point (b) of Article 4(1) of the 2013 Law
    6. Managers of European qualifying venture capital funds (EuVECA) within the meaning of Regulation (EU) No 345/2013
    7. Managers of European qualifying social entrepreneurship funds (EuSEF) within the meaning of Regulation (EU) No 346/2013
  • Information to be provided on marketing communications

The CSSF requires IFMs to provide information regarding marketing communications and will test to verify their compliance with the applicable requirements under Article 4 of the CBDF Regulation and the Guidelines. The practical and/or technical aspects (including frequency, formats and channel of submission) of implementing the collection of information (if any) will be communicated by means of additional annexes to this Circular and supplemented by a FAQ.

For further information and to discuss what this development might mean for you, please get in touch with your usual Baker McKenzie contact.

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Author

Laurent Fessmann is a Banking & Finance partner specializing in the formation and structuring of Luxembourg investment funds. He is a former managing partner of the Luxembourg office and the current co-chairman of the Baker McKenzie's Global Funds Steering Committee. He started his career in 1996 as in-house counsel in a French CAC40-listed company where he worked intensively on LBO transactions, capital markets and corporate law matters. Mr. Fessmann joined a Luxembourg business law firm where he became a partner prior to founding his own law firm in 2009. He is a highly regarded professional and recognized legal professional in Chambers, Legal 500, IFLR notably. He contributes time and knowledge in several market participant industry associations in particular as co-chairman of the ABBL/ALFI depositary forum working groups, the European Public Real Estate Association, the Luxembourg Private Equity Association and the Association of Global Custodians. He is also a regulator at fund conferences such as ALFI, IBCI and regularly invited to speak on internal or bank seminars.

Author

Catherine Martougin is a partner in the Funds & Asset Management team of the Baker McKenzie Luxembourg office. She has more than 20 years' experience in business law. Prior to joining the Firm, she practiced in elite international law firms in Paris and Luxembourg.

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