The draft law 6471 (the "Bill") transposing Directive 2011/61/EC of the European Parliament and of the Council of November 11, 2010 on alternative investment fund managers (the "AIFM Directive") has been deposited on Friday August 24, 2012 at the Luxembourg Parliament, the Chambre des Députés.
The most important legal impacts on the Luxembourg financial center introduced by the Bill will be the following:
Amendments to Luxembourg laws
The Bill foresees major amendments to several existing Luxembourg laws; the main amendments in particular are going to have an impact on the Luxembourg financial center and will affect:
- Law of August 10, 1915 on commercial companies,
- Law of June 15, 2004 relating to the company in risk capital ("SICAR"),
- Law of December 17, 2010 concerning undertakings for collective investment ("UCI"),
- Law of February 13, 2007 on specialized investment funds ("SIF") – which was already amended in March 2012 in order to implement few elements of the AIFM Directive1,
- Law of April 5, 1993 on the financial sector ("PSF"),
- Law of July 13, 2005 on institutions for occupational retirement as pension savings company with variable capital and pension savings associations ("SEPCAV/ASSEP"),
A new regime
In principle the Bill follows the main pillars of the AIFM Directive2.
Pursuant to the regime introduced already by the AIFM Directive, all managers managing or acting as management companies ("AIFM") to full scope funds ("AIFs") with assets exceeding the specific thresholds introduced by the Bill (and being exactly the ones already provided for by the AIFM Directive) need to be authorized as AIFM. The detailed requirements governing the authorization and supervision as well as ongoing organizational requirements of AIFM have been defined upon by the Bill, including the details relating to the European Passport.
Taking into consideration the different Luxembourg laws, which will be amended by the Bill, one may summarize for regulated vehicles that (i) SIFs and SICARs will be divided into funds being either qualified as an AIF or not and (ii) principally any UCIs being considered as AIFs. With regard to SOPARFIs, a qualification as AIF will depend on the structural details of each of such unregulated vehicle.
By amending the Luxembourg law of April 5, 1993 on the financial sector, the Bill (laying down the mandatory appointment of an independent depositary by the AIFs) provides for a new professional of the financial sector ("PFS") category, which will enable non-credit institutions to act as a depository for AIFs whereby these AIFs need (inter alia) to be closed-end (5 years period) and will not (in general) be allowed to invest in financial instruments.
By amending the Luxembourg law of August 10, 1915 on commercial companies, the Bill introduces a new company form, the new special limited partnership ("SLP"). Thus Luxembourg will follow countries like for example England, Jersey and Guernsey which already provide for such a kind of tax transparent and tailor made vehicle for the private equity market3.
In the same way as for the implementation of the UCITS IV Directive4, Luxembourg is keen to fulfill the implementation of the AIFM Directive as one of the first Member States. It is indeed planned that the Bill will be adopted in Luxembourg by the end of the year 2012. Meanwhile any concerned market players will need to analyze their current structures in order to be prepared for the new regime.
4 Directive 2009/65/EC of the European Parliament and of the Council of July 13, 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities which has been implemented by the Luxembourg law of December 17, 2010 concerning undertakings for collective investment. http://www.wildgen.lu/publications/articles/new-ucits-iv-law
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