Investor protection in the event of a material change to an open-ended UCI

CSSF Circular 14/591 (the "Circular") confirms the administrative practice of the CSSF in the case of a material change to investors' interests in an open-ended undertaking for collective investment ("UCI") governed by the Luxembourg Law of 17 December 2010 relating to UCIs and further clarifies the procedure and timing requirements.

The current notification practice consists of requiring a minimum notification period of one month to notify investors of a significant change to the UCI they are invested in during which time investors are given the right to request the redemption of their units without any redemption charge.

Subject to appropriate justification duly notified in advance to the CSSF, the latter may agree to impose only a notification period to duly inform the investors of the relevant change before it becomes effective, but without the ability for investors to redeem or convert their holdings free of charge.

The CSSF also reminds that the content of the Circular is without prejudice to the specific requirements of other competent authorities in jurisdictions (within and outside the European Union) where the UCI is registered for distribution.