Investment Fund Managers Must Report To The CSSF On The Performance Fee Models Used By All Luxembourg UCITS And AIFS That They Manage. For This Purpose, The CSSF Has Launched A Special eDesk Module For Performance Fees.
On 30 September 2021, the CSSF launched a new eDesk module for the declaration of performance fee models. The new eDesk module is devoted solely to performance fees. It consists of a set of questions whose answers will allow the CSSF to supervise regulatory compliance and to gather insight and data on the performance fee models used by Luxembourg regulated funds. The CSSF clarified its expectations with respect to the new eDesk module in an earlier press release announcing its launch, published on 22 September 2021.
Who is concerned?
Investment fund managers will need to complete the module questionnaire for all Luxembourg-based UCITS and supervised alternative investment funds – that is for all of the Part II UCIs, SIFs and SICARs they manage. For investment funds not using a performance fee, fund managers will need to submit a negative confirmation to this effect.
When accessing the new eDesk module, investment fund managers will find a list of the funds and sub-funds concerned under the module's performance fee dashboard.
What information is reportable?
The information that investment fund managers will have to provide is largely the same as that previously required by the CSSF under the UCITS questionnaire on performance fees, or in the confirmation letter and questionnaire on performance fees for alternative investment funds.
Thus, investment fund managers must provide information on the main elements of the performance fee models applied to each of their UCITS and alternative investment funds in scope of the ESMA Guidelines on performance fees in UCITS and certain types of AIFs, and must confirm the compliance of each performance fee model with those guidelines. We recommend that fund managers keep an up-to-date gap analysis ready to provide to the CSSF upon request.
When is the information due?
The deadline for submitting the questionnaire depends on each fund's financial year. In general, investment fund managers must file their declarations in the following periods:
- starting 30 September 2021, for funds whose financial year ends between July 2021 and December 2021;
- starting 1 January 2022, for funds whose financial year ends between January 2022 and June 2022.
The deadline for this initial declaration will usually be the closing date of the fund's financial year. As an exception, the CSSF requires that the initial declaration be submitted by 30 November 2021 for all funds with a financial year ending in July, August or September 2021.
Investment fund managers are responsible for keeping the performance fee declarations up-to-date. The initial declaration must be updated in the event of any changes.
The eDesk module on performance fees has been launched within the context of CSSF Circular 20/764 on ESMA's Guidelines on performance fees in UCITS and certain types of AIFs, with the purpose of integrating these guidelines into its administrative practice. The ESMA Guidelines are applicable to all UCITS, and have been extended to alternative investment fund managers marketing alternative investment funds to retail investors (with some exceptions). The ESMA Guidelines are intended to ensure supervisory convergence regarding performance fee modules, and to set out the circumstances in which performance fees can be paid. They apply since 6 January 2021.
For more information, please contact your usual contact in the Fund Formation group.
To access the CSSF press release on the launch of the new eDesk module on performance fees, please click here_
To access the CSSF's User guide for the eDesk module for performance fee declaration, please click here_
To access CSSF Circular 20/764 and the ESMA Guidelines on performance fees in UCITS and certain types of AIFs, please click here_
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.