On 30 December 2014, the Luxembourg Commission for the Supervision of the Financial Sector (the "CSSF") published its first FAQ concerning the Law of 28 July 2014 regarding immobilisation of bearer shares and units (the "Law") and its application to Luxembourg investment funds.
The key points covered in this FAQ can be summarised as follows:
- Details as to Luxembourg investment funds falling within the scope of the Law: all Luxembourg investment funds (SIFs(1), SICARs(2), UCITS(3)or UCIs(4)), incorporated in the form of an S.A., S.C.A. or FCP (Fonds Commun de Placement), if they have issued or intend to issue bearer shares or units.
- Timelines for the appointment of the depositary and the immobilisation of the bearer shares or units:
Last date to appoint a depositary
18-Feb-15
Compulsory suspension of voting rights linked to the bearer shares and units held by shareholders failing to deposit their bearer shares and units and deferral of payment distributions
18-Feb-15
Last date for deposit of bearer shares and units
18-Feb-16
Start of cancellation procedure for bearer shares and units which have not been deposited
18-Feb-16
- Information on the entity responsible for the appointment of the depositary: the management company for a Luxembourg FCP or the board of directors or management board for a Luxembourg investment fund set up in the form of an S.A. or an S.C.A.
- CSSF requirements in terms of information of the shareholders regarding this depositary appointment: this is a key point in this FAQ which clearly indicates the expectations of the CSSF in this respect whereas the Law was silent in relation thereto. The prospectus of the relevant investment funds will need to be updated and adequate information will need to be made available to the shareholders or unit holders of the relevant investment fund. This information will include the name of the depositary. It will also describe the implications and the deadlines to be met in order to comply with the new obligations provided by the Law.
- Eligible means for the communication of the information to shareholders: informing shareholders (in addition to the amendment of the prospectus) can be achieved by all means, including the following:
- the usual information means disclosed in the prospectus;
- the website of the investment fund or its management company;
- a notice published in at least two newspapers with adequate circulation, one of which at least being a Luxembourg newspaper. A global notice covering all investment funds managed by the same management company or AIFM would be acceptable as long as these investment funds are clearly identified; and
- information circulated through the distribution channel of the relevant investment fund.
- Possibility for the depositary to enter the name of an entity acting as a nominee into the register of bearer shares or units: the CSSF expressly allows the depositary appointed under the Law to register an entity acting as nominee as bearer shareholder, to the extent that this nominee entity is subject to professional obligations concerning the fight against money laundering and terrorist financing and directive 2005/60/EC or equivalent legislation.
The main purposes of this press release are (1) to remind the legal entities concerned of the legal deadline for the appointment of the depositary and (2) to highlight the obligations of a domiciliary agent under the law of 31 May 1999 on the domiciliation of companies to take appropriate actions if it becomes aware that the board of directors or managers of a company (in scope of the Law) for which it acts as domiciliary agent has failed to appoint a depositary.
For additional information on the Law, see our Newsflash dated 18 August 2014.
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(1) SIFs mean specialised investment funds within the meaning of the Law of 13 February 2007 on specialised investment funds.
(2) SICARs mean investment companies in risk capital within the meaning of the Law of 15 June 2004 on investment companies in risk capital (SICARs).
(3) UCITS mean undertakings for collective investment in transferable securities within the meaning of Part I of the Law of 17 December 2010 on undertakings for collective investment.
(4)UCIs mean undertakings for collective investment within the meaning of Part II of the Law of 17 December 2010 on undertakings for collective investment.
