The Grand Duchy of Luxembourg has ratified the first double tax treaty (the "Treaty") with Taiwan on 12 July 2014. Taiwan had already signed the Treaty and its protocol. Accordingly, the new Treaty will come into force on 1 January 2015.
ESMA Opinion 2014/1103 (the "Opinion") aims at amending the guidelines issued by CESR (CESR/10-049) in 2010 on a common definition of European money market funds (the "2010 Guidelines"). Management companies which manage European money market funds (as defined in the 2010 Guidelines and hereinafter referred to as "MMF") can no longer rely solely on the external credit rating given by recognised rating agencies to assess the credit quality of the money market instrument ("MMI") in which a MMF wishes to invest but are required to make their own assessment of the credit quality of this MMI.
On 20 October 2014, an amended version of the much anticipated Luxembourg E-Archiving Law Proposal (see our newsflash on the initial Proposal of 13 February 2013) was published.
The amended proposal introduces additional guarantees for clients of e-archiving services providers. However, it does not change the principles of the initial proposal and further confirms the rule that an electronic (or microform) copy of a document will be presumed to have the same probative value as the original provided a number of technical and other requirements to guarantee authenticity and integrity are complied with.
ESMA Guidelines 2014/937 (the "Guidelines") amend the guidelines on ETFs and other UCITS issues dated 18 December 2012 and provide new rules on the collateral diversification requirement and on the content of the UCITS annual report in the context of OTC financial derivative transactions and efficient portfolio management techniques.
Specifically, the new guidelines allow UCITS to derogate from the application of the rule according to which a basket of collaterals with an exposure to a single issuer may not exceed 20% of the net asset value inventory. The UCITS must, in this case, be fully collateralised in different transferable securities and money market instruments issued or guaranteed by a Member State, one or more of its local authorities, a third country, or a public international body to which one or more Member States belong and the UCITS must receive securities from at least six different issues where securities from any single issue cannot exceed 30% of the UCITS' net asset value.
The introduction of the derogation includes the obligation to ensure adequate transparency in the prospectus and in the annual report (points 43(e) and 48 of the Guidelines).
These new transparency obligations as well as the new rules on the collateral diversification requirement apply from 1 October 2014. Transitional provisions are provided for UCITS which exist before the application of the Guidelines.
On 30 September 2014, the CSSF issued Circular 14/592 (the "Circular") which implements the Guidelines and confirms that the securities and money market instruments referred to in the derogation provision must, among other things, be of very high quality and very liquid in order to allow the exposure of the UCITS to counterparty risk to be reduced in OTC derivative transactions and efficient portfolio management techniques.
As a general rule, the CSSF also restates that point (43) (f) of the Guidelines imposes on management companies and self-managed investment companies the requirement to identify, manage and reduce the risks linked to collateral through the risk management policy that they are required to employ according to Article 42, first paragraph of the Law of 17 December 2010, as amended, and as further specified by CSSF Regulation 10-4 (Articles 10, 13 and 43) and CSSF Circular 11/512.
On 9 October 2014, the Court of Justice dismissed the appeal lodged by Industries Chimiques du Fluor ("ICF") against the judgment of 18 June 2013, in which the General Court ("GC") rejected its application for annulment of the Commission's decision concerning a worldwide price-fixing and market-sharing cartel on the aluminum fluoride market. Two legal points merit attention.
On 16 July 2014, Luxembourg adopted the law concerning the compulsory deposit and immobilization of shares and units in bearer form (hereafter the "Law"), which aims to adapt Luxembourg law to the requirements of the Financial Action Task Force (on Money Laundering) (the "FATF") and the Global Forum on Transparency and Exchange of Information for Tax Purposes (the "World Forum") in relation to the identification of the holders of bearer shares and bearer units.
On 7 October 2014, the General Court ("GC") handed down a judgment in the hotly debated area of access to the file. Damage claimants are frequently seeking access to information contained in the Commission's file in order to substantiate their claims for damages. In this case, DB Schenker had requested the Commission access to the entire case file in the air cargo investigation, to the confidential version of the Decision or to the non-confidential version of the Decision on the basis of the Transparency Regulation (Regulation 1049/2002). After the Commission denied the requests, DB Schenker appealed to the GC. Seven air cargo carriers joined the proceedings as interveners on the Commission's side.
By law dated 28 July 2014 (published on 14 August 2014), the Luxembourg legislator substantially modified the rules governing the holding and transfer of bearer shares in Luxembourg (the "Law").
The purpose of the Law is to increase transparency and facilitate the identification of the holders of bearer shares, in line with the FATF Recommendations and the Global Forum on Transparency and Exchange of Information for Tax Purposes.
The French and Luxembourg Finance Ministers signed, on 5 September 2014, a Protocol amending Article 3 (the "Protocol") of the France-Luxembourg double tax treaty for the avoidance of double taxation and the establishment of rules of reciprocal administrative assistance with respect to taxes on income and fortune (the "Tax Treaty").
The EU's main data protection body, the Article 29 Working Party, recently published an Opinion on the application of European data protection rules to the Internet of Things. It shows an interesting evolution in the Working Party's opinions as the priorities of the anticipated General Data Protection Regulation are now cautiously shining through.
