Clarifications regarding the application of MiFiD to Luxembourg IFMs

On 10 of June 2021, the CSSF published a FAQ on the application of MiFID to Luxembourg investment Fund Managers (“IFMs”). This CSSF FAQ aims at clarifying under what circumstances and to what extent MiFID applies to IFMs, their third-party delegates and their investment advisers.

The new FAQ has been included in the following existing CSSF FAQ:

FAQ concerning the Luxembourg Law of 17 December 2010 relating to undertakings for collective investment: section 10;
FAQ concerning the Luxembourg Law of 12 July 2013 on alternative investment fund managers: section 26.

When is the deadline to comply with this FAQ?

IFMs are expected to comply with the CSSF FAQ as soon as possible and by 31 December 2021 at the latest.

What are IFMs expected to do?

IFMs should as soon as possible analyse their organisation model to assess:

  • the need for an authorisation to provide services under Article 101 (3) of the Law of 17 December 2010 or under Article 5(4) of the Law of 12 July 2013. Indeed IFMs (i.e. Chapter 15 management companies for UCITS and alternative investments fund managers “AIFMs”) which provide services such as portfolio management or marketing in relation to funds for which they are not the appointed IFM (typically by way of delegation by the appointed AIFM/UCITS management company) are no longer exempt from the scope of MiFID when performing the functions included in the collective portfolio management. These IFMs are now required to obtain a MiFID “top up” licence bearing in mind that they may however benefit from certain exemptions (more particularly intragroup service exemption);
  • appropriate compliance, by any third country entity acting as their delegate or undertaking services on their behalf, with the third country regime as foreseen under Circular CSSF 19/716 as amended by Circular CSSF 20/743 on the provision in Luxembourg of investment services or performance of investment activities and ancillary services in accordance with Article 32-1 of the Law of 5 April 1993 on the financial sector.

If you have any question regarding the above, please liaise with any of the key contact listed below or your usual Linklaters contact.

Silke Bernard, Investment Funds Partner / Luxembourg
Hermann Beythan, Partner / Luxembourg
Martin Mager, Investment Funds Partner / Luxembourg