LexGo

New CSSF administrative practice concerning the holding of ancillary liquid assets by UCITS
09/11/2021

In adapting its administrative practice, the CSSF has provided clarification on the holding of ancillary liquid assets by UCITS under the Law of 17 December 2010 on undertakings for collective investment.

On 3 November 2021, the CSSF published an updated version of its FAQ on the Law of 17 December 2010 on undertakings for collective investment (the “FAQ on the Law of 2010”), and an updated version of its FAQ on Regulation (EU) 2017/1131 on money market funds (the “FAQ on the MMF Regulation”). These updates aim to clarify the circumstances under which, and the extent to which, UCITS are permitted to hold ancillary liquid assets.

Through its FAQ on the Law of 2010, the CSSF gave the following clarifications:

  • A UCITS must limit ancillary liquid assets as referred to in article 41(2)(b) of the Law of 2010 to bank deposits at sight, such as cash held in current accounts with a bank accessible at any time. The ancillary liquid assets held are limited to 20% of the UCITS’ net assets. The 20 % limit may only be temporarily breached where exceptionally unfavourable market conditions so require and where such breach is justified by the interests of investors.
     
  • Bank deposits, money market instruments or money market funds that meet the criteria of article 41(1) of the Law of 2010 should not be included in the ancillary liquid assets referred to in article 41(2)(b) of the Law of 2010.
     
  • A UCITS is only authorised to hold (for investment purpose, cash management or in case of unfavourable market conditions) bank deposits, money market instruments or other eligible assets listed under article 41(1) of the Law of 2010 if this is clearly provided for in its investment policy. If a UCITS invests in a category of assets that is not foreseen in its investment policy, the provisions of CSSF Circular 02/77 on the protection of investors in case of a net asset value calculation error apply.
     
  • Margin accounts do not qualify as bank deposits under article 41(1)(f) of the Law of 2010, nor do they qualify as ancillary liquid assets under article 41(2)(b) of the Law of 2010.
     
  • The 20% limit on deposits made by a UCITS with a same body under article 43(1) of the Law of 2010 applies to ancillary liquid assets.
     
  • The 20% limit on deposits made with a same body under article 43(1) of the Law of 2010 does not apply to margin accounts.

Furthermore, through its updated FAQ on the MMF Regulation, the CSSF clarifies that the 10% limit on deposits made by a money market fund with the same credit institution under article 17(1)(b) of the MMF Regulation applies to the holding of ancillary liquid assets under article 9(3) of the MMF Regulation. Ancillary liquid assets held by a money market fund are limited to 20% of its net assets.

The CSSF expects UCITS to comply with the conditions described in the FAQs as soon as possible, and by no later than 31 December 2022.

For further information, please reach out to your usual contact within the Fund Formation group.

 

To access the CSSF FAQ on the Law of 2010, click here_

To access the CSSF FAQ on the MMF Regulation, click here_

Voir aussi : Arendt ( Mrs. Michèle Eisenhuth ,  Mrs. Géraldine Léonard )

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

Mrs. Michèle Eisenhuth Mrs. Michèle Eisenhuth
Partner
[email protected]
Mrs. Géraldine Léonard Mrs. Géraldine Léonard
Counsel
[email protected]

Tous les articles Droit bancaire

Derniers articles Droit bancaire

CSSF AML/CFT reporting tool: first reporting period approaches
21/06/2022

Following the publication of three circular letters [1] in December 2021 introducing new prudential and AML...

Read more

Introduction of a New eDesk Module – ePassporting
21/06/2022

Following the publication on 12 May 2022 of CSSF Circular 22/810 on pre-marketing and cross-border marketing notification ...

Read more

EU debates how to apply travel rule to cryptoassets
21/06/2022

Electronic payment transactions in the EU generally need to be accompanied by information about the payer and payee. EU la...

EU debates how to apply travel rule to cryptoassets Read more

EBA guidelines on the role and responsibilities of the AML/CFT Compliance Officer
19/06/2022

On 14 June 2022, the European Banking Authority (“EBA”) released its guidelines on policies and procedures in ...

EBA guidelines on the role and responsibilities of the AML/CFT Compliance Officer Read more

Derniers articles de Mrs. Michèle Eisenhuth

New CSSF Circular on UCI Administrators
17/05/2022

The Commission de Surveillance du Secteur Financier issued a circular regarding the authorisation and organisation of enti...

Read more

UCITS can no longer invest in loans
12/08/2020

The CSSF, Luxembourg’s supervisory authority for the financial sector, has announced that Luxembourg-domiciled UCITS...

Read more

New ESMA Guidelines on performance fees in UCITS and certain types of AIFs
15/04/2020

The Guidelines are applicable to all UCITS and have been extended to AIFMs which market AIFs to retail investors in accord...

Read more

UCITS KIID benchmark disclosures - the CSSF’s expectations
30/01/2020

The CSSF published a communication reminding UCITS management companies and self-managed UCITS to include the changes requ...

Read more

Derniers articles de Mrs. Géraldine Léonard

UCITS can no longer invest in loans
12/08/2020

The CSSF, Luxembourg’s supervisory authority for the financial sector, has announced that Luxembourg-domiciled UCITS...

Read more

UCITS KIID benchmark disclosures - the CSSF’s expectations
30/01/2020

The CSSF published a communication reminding UCITS management companies and self-managed UCITS to include the changes requ...

Read more

LexGO Network