15 February 2016

Atypical funds now more controlled in Luxembourg

Luxembourg Ministry of Finance, Pierre Gramegna, wants to strengthen the supervision of investment funds specialised in tangible assets by the Luxembourg Supervisory Authority (”CSSF”).

 

Luxembourg Ministry of Finance, Pierre Gramegna, wants to strengthen the supervision of investment funds specialised in tangible assets by the Luxembourg Supervisory Authority (”CSSF”). A bill has been introduced in order to allow the CSSF to give a veto over the assets in which funds (essentially SIFs and SICARs) invest, when they are held by non-professional investors, who wish to invest their savings in trendy atypical funds, like wines, diamonds, art works, ,….

 

Indeed, Mr Gramegna explains that such funds are often illiquid and could be subject of concrete and important risks. Investing in “atypical SIFs” will then be restricted to professional investors, with enough experience, knowledge and competencies to correctly evaluate potential risks. In that case, such investors will have the possibility to invest all, without any limits.

If SIFs don’t reserve shares and securities to such professionals investors, the kind of assets in which they will be allowed to invest will be determined by CSSF financial rules. Exemptions for funds already set up would occur.

In parallel, a bill introducing a new Luxembourg investment fund, RAIF, with light controls, has been proposed by the Luxembourg government. Investment funds with “atypical assets” will have the possibility to use such type of structure.

 

The Ministry of Finance also mentioned that in case of non respect of these financial rules, the CSSF will have the possibility to remove one or more compartments of a SICAR from its official list , but not all the vehicle.

 

Creatrust acts as a one-stop-shop to provide Investment Managers and Promoters with the optimal solution: from initial advice on the various options available to implementation of the chosen solution. We also organise the on-going management of income flows and domiciliation of the chosen investment fund structure. Creatrust will gladly assist you with a free Initial Consultation. Contact us

 

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