Banner Investment Funds in Luxembourg 2013

Investment Funds in Luxembourg

A technical guide - September 2013

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Table of contents

Foreword

1. Luxembourg investment funds

2. Current and future developments

3. UCI structures, regulation and governance

4. Authorization, supervision, restructuring and liquidation

5. Investment rules

6. Governance and liability

7. Management of UCIs: management companies and AIFM

8. Portfolio management and advice

9. Risk management and valuation

10. Administration

11. Depositary

12. Fund documentation and reporting

13. Expenses and taxation

14. Marketing

15. Stock exchange listing

Appendices:

  • Appendix I – Understanding UCIs

  • Appendix II - Summary of current primary regulations

  • Appendix III - Withholding tax rates applicable to Luxembourg UCIs

  • Appendix IV – Glossary

  • Appendix V – EY Asset Management related publications

  • Appendix VI - EY Asset Management related services

“One of the major challenges facing the industry today is dealing with the increasingly sophisticated regulatory environment. Regulatory spend is likely to cost global asset managers, on average, between US$ 50–100m over the next three to five years. Mastering regulation could be a source of real competitive advantage for asset managers over the coming years” Michael Ferguson

New in this edition

Key updates

  • Management companies and AIFM
  • Governance
  • Risk management and valuation

Key regulatory developments

  • UCITS, including management company substance, guidelines on ETFs and other UCITS issues, UCITS V on depositary and remuneration and UCITS VI on eligible assets
  • AIF, including Luxembourg AIFM Law, EuVECA and EuSEF, and European Long-Term Investment Funds
  • Money market funds
  • Exchange traded funds
  • Liquidity risk management and stress testing
  • Updated ALFI Code of Conduct
  • PRIPS KIID
  • MiFID
  • EMIR
  • CRD IV and capital requirements for bank investments in UCIs
  • Solvency II
  • Anti-money laundering and counter terrorist financing (AML/CFT)
  • Financial benchmarks
  • Administrative cooperation on exchange of tax information
  • FATCA
  • EU Financial transaction tax
  • Shadow banking

About this Technical Guide

The purpose of this technical guide is to provide, in a clear and concise format, an introduction to Luxembourg as a center for investment funds, the types of funds available and a summary of the regulations applicable to the formation and operation of Luxembourg investment funds. It also covers the regulations applicable to management companies and AIFM based in Luxembourg, and provisions applicable to other Luxembourg service providers.

The 2013 edition has been updated to cover recent legislation and regulation; it also outlines current and future developments in Luxembourg, the EU, the US and internationally.


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