Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.

4. Results: Answers
Alternative Investment Funds
Must alternative investment funds be authorised or licensed in your jurisdiction?

Answer ... Luxembourg alternative investment funds (AIFs) may choose:

  • to be governed by a particular legal regime (eg, specialised investment fund (SIF) or société d’investissement en capital à risque (SICAR)) (‘regulated AIFs’); or
  • to operate as an unregulated fund (‘unregulated AIFs’):
    • with no particular legal regime applicable and governed by Luxembourg corporate law (eg, société en commandite par actions, société en commandite spéciale or société en commandite simple); or
    • subject to a particular regime, such as reserved alternative investment funds (RAIFs) subject to the RAIF Law.

Regulated AIFs are subject to the prior authorisation and ongoing prudential supervision of the Luxembourg supervisory authority of the financial sector, the Commission de Surveillance du Secteur Financier (CSSF). Unregulated AIFs do not require the prior authorisation of the CSSF for their set-up and are not subject to the CSSF’s ongoing supervision. However, both unregulated and regulated AIFs will fall within the scope of the AIF Manager (AIFM) Law and will be indirectly affected via the regulation of their AIFM.

This entails that, in case of a regulated AIF, there will be two layers of regulation:

  • at the level of the AIF itself (via the product); and
  • at the level of the AIFM (via the manager).

By contrast, unregulated AIFs are regulated only indirectly via their AIFM. There is no regulation at the level of the AIF (product) itself.

For more information about this answer please contact: Jérémie Schaeffer from ATOZ Tax Advisers
If so, what criteria must be satisfied to obtain authorisation? Do any restrictions apply in this regard?

Answer ... Authorisation will be issued once the CSSF has verified that all fund documentation, as well as the application form, documents and information submitted to it, complies with the relevant legal regime (ie, the SICAR or SIF Law) and the relevant CSSF circulars, as applicable.

The requirements will depend on the applicable legal regime under the relevant product law (Part II of the Undertakings for Collective Investment Law, the SIF Law or the SICAR Law).

Please see questions 2.3 and 3.2 below for more details.

For more information about this answer please contact: Jérémie Schaeffer from ATOZ Tax Advisers
What is the process for obtaining authorisation of alternative investment funds and how long does this usually take?

Answer ... For regulated AIFs, an application file must be submitted to the CSSF together with all required supporting documents through the CSSF eDesk portal.

The application must contain the following documents and authorisation will be granted only if the CSSF has approved them:

  • the draft offering memorandum/prospectus;
  • the draft articles of association, limited partnership agreement or management regulations of the AIF and of its general partner (if applicable);
  • the agreements with service providers (AIFM, depositary, administrator, investment adviser, investment manager, auditor);
  • a description of the risk management process and the conflict of interest policy;
  • the business plan and the initiator’s structure chart;
  • the CSSF anti-money laundering/counter-terrorist financing investment fund market entry form; and
  • the completed CSSF questionnaire to set up the AIF (including the form regarding the sub-fund, if applicable).

The members of the board must be of sufficiently good repute and have sufficient experience to perform their duties. To this end, the CSSF will require the following documents from each board member:

  • a dated and signed CV;
  • a certified copy of his or her ID or passport;
  • a declaration of honour form;
  • an excerpt from the criminal record(s); and
  • a time allocation assessment form.

Additional information and documents may be requested by the CSSF.

The CSSF approval process may vary on a case-by-case basis, but it is generally recommended to count for between six and nine months (more likely 12 and 18 months for a SICAR) as from the date on which the complete CSSF file is submitted.

For more information about this answer please contact: Jérémie Schaeffer from ATOZ Tax Advisers
Alternative Investment Funds