Authorised and registered AIFM: additional information to be submitted to the CSSF

1. Authorised and registered AIFM: additional information to be submitted to the CSSF

On 5 May 2015, the CSSF released a new circular (Circular 15/612) (the "Circular")on the information to be submitted to the CSSF by Luxembourg authorised AIFM and Luxembourg registered AIFM (together referred to as "Targeted AIFM(s)").

The CSSF clarifies the reporting obligations in relation to unregulated alternative investment funds (established in Luxembourg, in another EU Member State or in a third country) and/or regulated alternative investment funds established in a third country (both are referred to as "Additional AIFM").

This follows the observation that the reporting obligations imposed by the AIFMD and the implementing legislation in Luxembourg are not sufficient to enable the CSSF to fulfil its reporting obligation towards the ESMA (European Securities Market Authority).

In order for the CSSF to have up-to-date information, Targeted AIFMs must complete the form attached to the Circular. The form can also be downloaded from the CSSF website.

This additional information must be sent to the CSSF within 10 working days following the date on which the Targeted AIFM started managing an Additional AIFM.

2. Updated ESMA Q&A on AIFMD

In March and more recently on 12 May 2015, new questions were added to the ESMA Q&A on the application of the AIFMD:

  • Notification of AIFM (Section IV): the question relates to the notifications required in the case where an AIFM is already managing AIFs in a host Member State under Article 33 of the AIFMD and wishes to manage a new AIF in that host Member State.

ESMA confirms that the original notification by an AIFM under Article 33(2) of the AIFMD is valid for all the AIFs it intends to manage in a given Member State and that a new notification is not required. In this case, however, the AIFM must update the information given to the competent authority of its home Member State in accordance with Article 33 (6) of the AIFMD.

  • Additional own funds required at the level of the AIFM in the case of cross-investment between AIFs managed by the same AIFM (Section X):

ESMA clarifies that an AIFM may exclude investments by AIFs in other AIFs it manages for the calculation of additional own funds under Article 9(3) of the AIFMD.

These investments, however, must be included in the calculation of additional own funds to cover potential liability risks arising from professional negligence under Article 9(7) of the AIFMD given that, according to ESMA's Q&A, they increase the operational risk.

  • Scope (Section XI) - Master feeder structures: in a master feeder structure where an EU feeder AIF invests in a non-EU master AIF managed by a non-EU AIFM, the non-EU AIFM of the non-EU master AIF is not required to be authorised on the basis of Article 36 AIFMD.

ESMA, however, confirms that Member States may impose stricter rules on the AIFM in respect of the application of Article 36 of the AIFMD and may therefore, on the basis of their national law, require the non-EU AIFM of the non-EU master AIFs to be authorised.

Finally, further information is provided on reporting (Section III) and on leverage (Section VII).

3. EHP brochure: The AIFMD and its implementation in Luxembourg - updated version April 2015

This brochure presents the Luxembourg Law of 12 July 2013 on alternative investment fund managers (the "AIFM Law") in consolidation with the AIFMD and the Level 2 AIFM Regulation, as well as consolidating, in a single document, all relevant AIFM legislation and guidelines (including the CSSF FAQ on the AIFM Law and the Level 2 AIFM Regulation).

The April 2015 update includes the March 2015 update of the ESMA Q&A on the AIFMD. This brochure will be further amended shortly in order to reflect the May 2015 update of the ESMA Q&A.