Answer ... The requirements applicable to the marketing of alternative investment funds (AIFs) in Luxembourg depend on:
- the country of origin of the AIF member (AIFM) (EU or non-EU);
- whether the AIFM is authorised or registered;
- the country of origin of the AIF (EU or non-EU); and
- the types of investors targeted.
The EU marketing passport is available only to authorised EU AIFMs, subject to a simple notification procedure between the home country regulator of the AIFM and the regulator of the EU member state in which the AIF is to be marketed.
Registered EU AIFMs do not benefit from the marketing passport unless they opt in and subject themselves to the requirements of the full regime of the AIFM Law. They must comply with the local requirements applicable in the country of distribution. In Luxembourg, private placement is available for registered EU AIFMs.
Non-EU AIFMs intending to market EU AIFs within the European Union must obtain prior authorisation from the Commission de Surveillance du Secteur Financier (CSSF) where Luxembourg is the member state of reference of the AIFM pursuant to the AIFM Law.
Answer ... Currently, the EU marketing passport is not available to non-EU AIFMs.
Non-EU AIFMs wishing to market AIFs in the European Union must obtain prior authorisation from the CSSF where Luxembourg is the member state of reference of the AIFM.
A non-EU AIFM must comply with the provisions of the AIFM Law, including the transparency, disclosure and reporting requirements, and must appoint a legal representative established in Luxembourg.
In addition, appropriate cooperation arrangements must be in place between the CSSF, the competent authorities of the home member state of the EU AIF and the supervisory authorities of the third country in which the non-EU AIFM is established.
The third country in which the non-EU AIFM is established must not be listed as a non-cooperative country or territory by the Financial Action Task Force; and cooperation arrangements for the effective exchange of information on tax matters, including multilateral tax agreements, must be in place between such third country and the member state of reference.
Effective supervision must not be prevented by the national laws and of the third country governing the non-EU AIFM.
Answer ... A non-EU AIFM intending to market AIFs in the European Union must submit a request for authorisation to the CSSF where Luxembourg is the member state of reference of the non-EU AIFM.
Upon receipt of the application, the CSSF will assess whether the determination by the non-EU AIFM of Luxembourg as the member state of reference complies with the AIFM Law. If the CSSF considers that this is not the case, it will indicate the reasons for its refusal. If the CSSF agrees with the determination, it will notify the European Securities and Markets Authority (ESMA) and request advice on such assessment. Within one month of receipt of the notification, ESMA shall advise the CSSF on its assessment regarding the determination of the member state of reference.
Where the EU marketing passport is available, there is no authorisation process, but merely a simple notification process. Upon receipt of the notification file with the documents and information set out in Appendix III of the AIFM Law, the CSSF will inform the AIFM within 20 working days as to whether it may start marketing the AIF in Luxembourg. The AIFM may start marketing the AIF in Luxembourg from the date of notification of the decision of the CSSF. If the AIF is established in an EU member state (other than Luxembourg), the CSSF must inform the competent authorities of the AIF that the AIFM may start marketing in Luxembourg.
Answer ... Shares and units of AIFs can be marketed only to professional investors - that is, professional clients or clients who have requested to be treated as professional clients within the meaning of Annex II of Directive 2014/65/EU.
However, for the purpose of subscription of shares, interests in a specialised investment fund (SIF), société d’investissement en capital à risque (SICAR) or reserved alternative investment fund, the investors must additionally qualify as well-informed investors within the meaning of such product laws.
Answer ... There is no harmonisation at EU level with respect to the requirements for marketing materials in general.
In case of marketing in Luxembourg, the following documentation and information shall be provided to the CSSF in accordance with Annex III of the AIFM Law:
- a notification letter, including a programme of operations identifying the AIFs that the AIFM intends to market and information on where the AIFs are established;
- the AIFs’ management regulation or instruments of incorporation;
- the identity of the depositary of the AIFs;
- a description of, or any information on, the AIFs available to investors;
- information on where the master AIF is established, if the AIF is a feeder AIF;
- any additional information referred to in Article 21, paragraph 1 of the AIFM for each AIF that the AIFM intends to market; and
- information on arrangements established to prevent units or shares of the AIFs from being marketed to retail investors (where relevant).
In case of marketing in a member state other than Luxembourg, the notification file for marketing must, in addition to the criteria set out above, include an indication of the member state in which the AIFM intends to market the units or shares of the AIF to professional investors (Annex IV of the AIFM Law).
Answer ... There are no other specific requirements applicable to the marketing materials for AIFs as such.
However, the product regimes, such as the SIF Law and the SICAR Law, require that the offering document/prospectus of the AIF include information necessary for investors to be able to make an informed judgement of the investment proposed to them and, in particular, of the risks attached thereto.
In addition, certain disclosure requirements apply to all AIFs (regulated or unregulated) in accordance with Article 21 of the AIFM Law.
Answer ... Authorised EU AIFMs can market shares/units of EU AIFs to professional investors in Luxembourg with the EU marketing passport, subject to a simple prior notification procedure with the competent authorities of the EU AIFM’s home member state. No prior authorisation is required. In case of a Luxembourg AIFM, the CSSF will prevent the marketing only if the AIFM’s management of the AIF or the AIFM itself does not or will not comply with the AIFM Law.
Luxembourg-regulated AIFs (eg, SIFs, SICARs) managed by Luxembourg AIFMs are automatically authorised to market in Luxembourg to investors without any prior notification procedure.
EU AIFMs can market shares/units of non-EU AIFs in the European Union to professional investors if they comply with the national private placement regime. The AIFM must meet all requirements of the AIFM regime (with exceptions regarding the depositary regime) and comply with specific local requirements of the regulator. An EU or Luxembourg AIFM may market a non-EU AIF to professional investors in Luxembourg subject to a prior notification procedure to the CSSF in accordance with Article 37 of the AIFM Law.
Non-EU AIFMs wishing to market AIFs in the European Union must obtain prior authorisation from the CSSF where Luxembourg is the member state of reference of the AIFM. Non-EU AIFMs wishing to market AIFs to professional investors in the territory of Luxembourg must submit to the CSSF an information form prior to any marketing and comply with the minimum conditions under Article 45 of the AIFM Law.
Answer ... A non-EU AIFM intending to market AIFs in the European Union shall appoint a legal representative established in the member state of reference. The local representative will act as the contact point of the non-EU AIFM in the European Union and shall perform the compliance functions in relation to the management and marketing activities performed by the AIFM together with the AIFM.
Answer ... The marketing of AIFs by AIFMs to retail investors in Luxembourg must comply with the requirements of Article 46 of the AIFM Law, as follows:
- The AIF must be subject to permanent supervision by a supervisory authority in its home member state in order to ensure the protection of investors. In Luxembourg, this condition will be deemed fulfilled with respect to undertakings for collective investment (UCIs) subject to Part II of the UCI Law.
AIFs must be subject in their home state to:
- regulation providing investors guarantees of protection; and
- supervision at least equivalent to that provided by Luxembourg laws governing AIFs authorised to be marketed to retail investors in Luxembourg; and
- There must be cooperation between the CSSF and the supervisory authority of the AIF.
In practice, the marketing of Luxembourg AIFs to retail investors in Luxembourg will be limited, since generally AIFs in Luxembourg can be marketed only to professional investors, with the exception of UCIs that are subject to Part II of the UCI Law.