LexGo

CSSF prohibition of loan investments for UCITS
27/08/2020

On 7 August 2020, the Luxembourg supervisory authority for the financial sector, the CSSF, updated its frequently asked questions (the FAQ) on the Luxembourg law of 17 December 2010 on undertakings for collective investment (the 2010 Law), publishing a ninth version of its FAQ.

A new question - 1.13 of the FAQ - has been included pursuant to which it is asked whether loans constitute eligible investments for undertakings for collective investment in transferable securities (UCITS). The CSSF has answered that loans cannot be considered as eligible assets under Article 41 (1) and (2) (a) of the 2010 Law, as they do not qualify as:

money market instruments within the meaning of Article 1 (23) of the 2010 Law and Articles 3 and 4 of the Grand-ducal regulation of 8 February 2008 relating to certain definitions of the amended law of 20 December 2002 on undertakings for collective investment and implementing Commission Directive 2007/16/EC of 19 March 2007 implementing Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to UCITS as regards the clarification of certain definitions (the 2008 GD Regulation), further clarified by the CESR[1] Guidelines[2]; and
transferable securities within the meaning of Article 1 (34) of the 2010 Law and Article 2 of the 2008 GD Regulation, further clarified by the CESR Guidelines.

In addition, the CSSF is requiring all Luxembourg UCITS which have invested in loans to divest from these positions by 31 December 2020. These divestments must be performed taking into account the best interest of investors.

Furthermore, the CSSF requires from these UCITS to organise the relevant amendments to their prospectuses by 31 March 2021 at the latest.

 

[1] Committee of European Securities Regulators, being the predecessor of European Securities and Markets Authority (ESMA)

[2] CESR guidelines concerning eligible assets for investment by UCITS, March 2007 (updated September 2008), Ref.: CESR/07-044b

Related : Ogier ( Rebecca Macé-Balebs ,  Mr. Benoît Rose )

[+ http://www.ogier.com]

 Rebecca Macé-Balebs Rebecca Macé-Balebs
Associate
rebecca.mace-balebs@ogier.com
Mr. Benoît Rose Mr. Benoît Rose
Partner
benoit.rose@ogier.com

Click here to see the ad(s)
All articles Banking law

Lastest articles Banking law

CSSF Carried Out a COVID-19 Thematic Review of Issuers’ Reporting
27/11/2020

The COVID-19 pandemic has hit Luxembourg as other European countries since the beginning of the year 2020 and has adversel...

Read more

FCA communication to Luxembourg-based entities about the UK temporary permissions regime
23/11/2020

On 19 November 2020 the Luxembourg supervisory authority for the financial sector, the CSSF, issued press release 20/...

Read more

ELTIF Reform European Commission publishes consultation
02/11/2020

On 19 October 2020, the European Commission published a public consultation on the review of the European long-term invest...

Read more

New Luxembourg Draft Law Transposing CRD V and BRRD II
20/10/2020

The purpose of the draft law 7638, submitted to the Luxembourg Parliament (Chambre des Députés) on 27 July 2...

New Luxembourg Draft Law Transposing CRD V and BRRD II Read more

Lastest articles by Rebecca Macé-Balebs

FCA communication to Luxembourg-based entities about the UK temporary permissions regime
23/11/2020

On 19 November 2020 the Luxembourg supervisory authority for the financial sector, the CSSF, issued press release 20/...

Read more

Luxembourg becomes first European country to launch a sustainability bond framework
21/09/2020

The Luxembourg Ministry of Finance announced on 2 September 2020 that the country had become the first European country to...

Read more

ESG: how can clients avoid 'greenwashing'?
01/10/2019

As environmental, social and governance (ESG) principles become increasingly mainstream and with asset managers under incr...

Read more

CSSF issues new guidance on the AML/CFT Investment Fund Questionnaire
30/05/2019

On Thursday 23 May 2019, the Luxembourg Supervisory Authority of the Financial Sector (Commission de Surveillance du Secte...

Read more

Lastest articles by Mr. Benoît Rose

CSSF: ESMA guidelines on liquidity stress testing in UCITS and AIFs
09/10/2020

In the midst of the COVID-19 crisis, liquidity risk management is certainly a topical question, as it is meant to prepare ...

Read more

Luxembourg becomes first European country to launch a sustainability bond framework
21/09/2020

The Luxembourg Ministry of Finance announced on 2 September 2020 that the country had become the first European country to...

Read more

CSSF on mandatory notifications in a no-deal Brexit context
18/07/2019

Following the publication of Luxembourg laws of 8 April 2019[1] (see our previous briefing here), the Luxembourg...

Read more

ESMA updates AIFMD and UCITS Q&A
11/06/2019

The European Securities and Markets Authority (ESMA) has published and updated version of its questions and answers (Q&...

Read more

LexGO Network