Law Regulating Investment Funds in LuxembourgUpdated on Monday 25th March 2019
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Investment funds in Luxembourg are regulated by a set of laws; both local and foreign investors who want to establish any type of investment fund should comply with the stipulations of the law under which that particular fund can function. The Fund Law, imposed by the local authorities starting from 17 December 2010, is comprised of three sections, regulating the legal environment of various types of funds. Fund legislation also refers to the SIF (Specialized Investment Fund) Law. Businessmen who require more information on the fund legislation in Luxembourg can address to our team of experts for more details on this matter.
Part I Fund Law in Luxembourg
The Part I Fund Law refers to investment funds and transferable securities or to financial instruments. The Article 41 of the law prescribes specific types of funds activities which fall under the regulation of this law.
The law refers to funds incorporated as:
• Société d'Investissement en Capital à Risqué (SICAR);
• Fonds Commun du Placement (FCP).
The video below offers a short presentation on the legislation regulating the Luxembourg investment funds:
The legislation in this sense prescribes that such funds have to be open-ended and that the central administration has to be established in Luxembourg. It is allowed to establish a central administration within the EU for funds set up as UCITS (Undertakings for Collective Investments in Transferable Securities).
Part II Fund Law in Luxembourg
Part II Fund Law is applicable to funds with registered Alternative Investment Fund Managers (AIMF) or with authorized AIMF. The assets of these types of funds are not regulated by the provisions of the law, but they do require an approval from the CSSF (Commission du Surveillance du Secteur Financier).
The both pillars of Part II Fund Law are applicable to funds set up as SICAV, SICAR or FCP; investors have more flexibility under the Part II Fund Law, as they can establish the funds as open or closed-ended. It is necessary to establish the central administration in Luxembourg and our team of financial representatives can provide more details in this sense.
SIF law in Luxembourg
The SIF Law, imposed in 13 February 2007, provides unrestricted options in terms of the eligible assets of the fund. They can also be set up as the above mentioned legal structures.
Investors who need further details on the legislation regulating the investment funds in Luxembourg can contact our financial specialists for a complete presentation on the provisions of the law.