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Investment Funds in Luxembourg - A technical guide - September 2012 - Ernst & Young - Luxembourg

A technical guide - September 2012Investment Funds in Luxembourg

Table of contents

1. Luxembourg investment funds

2. Current and future developments

3. UCI structures, regulation and governance

4. Investment, risk management and valuation rules

5. Authorization, ongoing supervision, restructuring and liquidation

6. Management companies

7. Investment management and advice

8. Administration

9. Depositary

10. Fund documentation and reporting

11. Expenses and taxation

12. Marketing

13. 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 – Ernst & Young asset management related publications

  • Appendix VI - Ernst & Young investment fund services
  • Share

"The future priorities will be protecting and enhancing the 'UCITS brand', building an 'AIF brand', reforming distribution models, value-added regulatory investor protection and greater alignment of interests between investors and managers."
Michael Ferguson

New in this edition − key opportunities and challenges

Product range
  • AIFM strategic review of alternative investment fund product range
  • Refocus on UCITS in light of enhanced AIFM Directive requirements
  • Enhanced requirements for UCITS using efficient portfolio management techniques
  • Limitations on UCITS investing in financial indices
  • Master-feeder UCITS structures
  • Specific requirements for specific fund types such as money market funds and exchange traded funds (ETFs)

Operating model
  • Adapting model to emerging geographical and regulatory areas: European Union, United States, Asia and other regions
  • AIFM strategic review of operating model
  • Cross-border management
  • Review of delegation arrangements

Governance, operations and compliance
  • Implementing remuneration policies and procedures
  • Increased substance requirements for managers
  • Enhanced risk management and compliance
  • New depositary requirements
  • New derivatives clearing, reporting and risk mitigation requirements
  • New short selling requirements
  • Ensuring FATCA compliance

Distribution
  • Enhanced standards applicable to sales process, such as suitability requirements
  • Evolving investor information requirements
  • Review of retrocession arrangements

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 based in Luxembourg, and provisions applicable to other Luxembourg service providers.

The 2012 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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