On 25 October 2024, the Commission Delegated Regulation (EU) 2024/2759 (the "Delegated Regulation") was published, supplementing the revised European Long-Term Investment Fund (ELTIF) framework under the ELTIF 2.0 regime. This Delegated Regulation introduces specific guidelines for redemption policies, liquidity management, and cost disclosures—key to aligning ELTIFs with enhanced investor protections and operational standards.
Key Requirements Under the New ELTIF RTS
- Redemption and Liquidity Management: ELTIFs must now maintain a minimum level of liquid assets to meet redemption demands and provide criteria for matching unit or share transfer requests, ensuring flexibility and liquidity.
- Cost Transparency: Enhanced cost disclosure requirements ensure ELTIFs provide a clear breakdown of fees and expenses for investors.
- Applicability: Effective 26 October 2024, the regulation primarily applies to ELTIFs authorized from 10 January 2024 onwards. ELTIFs that retain the original framework remain subject to Commission Delegated Regulation (EU) 2018/480.
CSSF's Revised Application Questionnaire
In alignment with the EU regulation, the CSSF has issued a communiqué introducing an updated ELTIF application questionnaire. Effective immediately, this questionnaire is required for all new ELTIF applications and focuses on:
- Enhanced Documentation: Funds must detail their investment strategy, fund structure, and liquidity provisions, especially for retail-oriented ELTIFs. Each prospectus should clearly outline liquidity management in line with the ELTIF RTS.
- Streamlined Application Process: The CSSF aims to expedite reviews by requiring precise, complete information in the questionnaire, reinforcing Luxembourg's standing as a center for sustainable long-term investments.
The ELTIF 2.0 regulatory enhancements and CSSF's streamlined application underscore the EU's commitment to supporting long-term investment vehicles. These updates foster an environment conducive to growth, transparency, and investor protection, reinforcing Luxembourg's role in the European fund landscape.
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