Most Read Contributor in Luxembourg, February 2017
On 9 June 2016, the Commission de Surveillance du Secteur
Financier (CSSF) issued an updated version – number 10
– of its Questions & Answers (Q&A) document on the
Alternative Investment Fund Managers Directive (AIFMD).
The update introduces guidance on loan origination by AIFs in
Luxembourg. The CSSF confirms that the loan origination activity is
permitted for AIFs in Luxembourg since neither the law transposing
the AIFMD (AIFM Law) nor the different product laws applying to
alternative funds, if applicable, forbid such activity. Certain
specific EU product regulations such as the European Long Term
Investment Funds (ELTIF), the European Venture Capital Funds
(EuVECA) and the European Social Entrepreneurship Funds (EuSEF)
regulations, even explicitly allow these AIFs to originate
Funds engaging in loan origination activities must comply with
the AIFM Law and where applicable, with their respective product
The CSSF places emphasis on the necessity for the AIFM or, where
applicable, the AIF itself, to address all aspects and risks of the
loan origination activity. They should also:
Rely on an adequate organisational and
Hire sufficient staff with the required expertise and
experience in the activity and have adequate technical resources in
Establish a strong risk management process to address credit
and liquidity risk management, concentration and risk limitation
which are key issues especially for loan origination
Have policies in place, i.e. relating to assets and investors
which specify loan and investor categories, how conflicts of
interest are addressed, and ensure proper disclosure and
The AIFM or the internally managed AIF are responsible for the
implementation of a strong framework, appropriate to the loan
The CSSF will assess this framework at the occasion of the
approval process and on an ongoing basis in the context of its
The same rules apply by extension to the loan participation and
loan acquisition activity for AIFs in Luxembourg.
The updated Q&A on the application of the AIFMD is available
under the following web
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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As the banking industry continues to be shaped by technological and regulatory forces, we’ve gathered our European Central Bank (ECB) experts to hold a conference about this changing landscape. KPMG’s ECB desk from Frankfurt will join our Luxembourg banking partners to unpack the latest news from the ECB, including regulations that will affect the future of banking.
We would be very pleased if you could attend this event, which will be held at our Luxembourg headquarters in Kirchberg on 30 March. The talk will begin at 5:00pm and last until 6:00pm, at which point the evening will be turned over to a networking session with drinks.
Please let us know if you are able to attend by using the registration button above (by 27 March, if possible).
We look forward to seeing you there!
Here in Luxembourg, LPEA are holding an event which will offer new initiatives by bringing General Partners (GPs) and Limited Partners (LPs) together to examine and speak on the industry from the “360” perspective, leaving no stone unturned. We are a sponsor of the event, as well as having a speaker present. David Capocci, Partner and Head of Alternative Investments will be offering his own insight on the industry nowadays.
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