Corporate, Bank, Lending, Structured Finance, Securitisation, Capital Markets, Investment Funds, Tax, Labour Law Newsletter - September 2012

CORPORATE

AIFMD – Implementation In Luxembourg – New Provisions Relating To SCS And SCA.

The draft law of August 24th 2012 (the "Draft Law") implementing the European Directive 2011/61/EU of the European Parliament and of the Council of June 8th 2011 on alternative investment fund managers (AIFMD) aims at improving and developing the Luxembourg alternative investment fund industry. The success of Luxembourg in this respect will depend on its ability, on the basis of its long term experience, to attract ever more foreign investors.

To this effect the Draft Law also intends to amend the Luxembourg laws of August 10th 1915 on commercial companies as amended and of December 19th 2002 on the Luxembourg Trade and Companies' Register:

As regards partnerships limited by shares (sociétés en commandite par actions - the "SCA"), the amendments mainly consist in confirming that the SCA can also be managed by non-shareholders (there being then no longer an obligation, but merely a right, for the unlimited shareholder (associé commandité) to manage the SCA), and clarifying which functions the limited shareholders (associés commanditaires) can play without engaging unlimited joint and several liability. The regime of limited corporate partnerships (sociétés en commandite simple - the "SCS") is modernized, the Draft Law creating more flexibility by enabling the partners to freely determine in their partnership agreement (contrat social): the name, the capital structure (the sub-division of the capital contributions into partnership interests (parts d'intérêts), which may be represented by an instrument, becoming possible), the management (which may, just as for the SCA, now also be run by non-partners whose liability is limited, like agents, to the exercise of their manager functions), their financial rights (in terms of sharing in any distributions and repayments with the possibility to even totally exclude a partner in this respect), the decision-taking process for partners, and any transfer restrictions and redemption conditions for the partnership interests. In the absence of any specific contractual provisions, the Draft Law provides for new default terms and conditions in respect of the management powers, the rights to share in the profits and losses of the SCS, the proceedings for general meetings of partners and the transfer of partnership interests. Finally, the filing and publication formalities are simplified as the details of the limited partners and their contributions have no longer to be made public; while the SCS would now be required to keep for internal purposes a special partners' register. Finally and most importantly, the Draft Law introduces the new special limited partnership (société en commandite spéciale - the "SCSp"), which follows substantially the same regime as the above amended SCS, but has no legal personality separate from that of its partners. Hence, by offering foreign investors optimised structuring opportunities for Luxembourg investment products, with comparable features to the internationally well-known and accepted standards, i.e. the Anglo-Saxon limited partnership regime, the Draft Law's main purpose is to achieve the building of an on-shore European investment centre.

BANK LENDING, STRUCTURED FINANCE, SECURITISATION

Questions & Answers (Q&A) On Securitisation – CSSF July 2012

In July 2012 the Commission de Surveillance du Secteur Financier (CSSF) published a Questions / Réponses (Q&A) on securitisation replacing the explanations on the regulatory oversight set out by the CSSF in its 2007 annual report.

For further information on this topic we refer you to our legal alert of September 2012 available on our website http://bsp.lu/publications.html

CAPITAL MARKETS

Circular 12/539 – Technical Specifications Regarding The Communication To The CSSF Of Documents Under The Law On Prospectuses For Securities (The "Prospectus Law") And General Overview Of The Aforementioned Law

On July 6th 2012 the CSSF published circular 12/539 (the "New Circular") which replaced with immediate effect circular 05/226 of December 16th 2005 (the "Previous Circular").

Part I of the New Circular has not changed significantly from Part I of the Previous Circular save that it presents the changes introduced by the law of July 3rd 2012 (the "2012 Law") transposing Directive 2010/73/EU of November 24th 2010.

The Previous Circular had only set down technical procedures for submission of documents for the purposes of approval. The New Circular amends those procedures slightly and introduces new technical procedures regarding submissions for:

the purposes of obtaining a notification (i.e. passporting), filing purposes, and communication purposes. Furthermore, Section 8 of the Previous Circular setting down the technical procedures for submitting notices for offers to the public and admission to trading on a regulated market is not included in the New Circular. These notices which were referred to in articles 5, 6 and 30 of Parts II and III of the Prospectus Law (prior to its amendment) are no longer required since the enactment of the 2012 Law.

Pursuant to the New Circular the submission of documents to the CSSF can be validly made by an issuer, an offeror or by a person asking for the admission on a regulated market or a person acting on behalf of one of these persons (the "Déposant(s)") via email. The CSSF has designated new email addresses (prospectus.filing@cssf.lu and prospectus.communication@cssf.lu) for submissions for filing/communication purposes. If a Déposant uses other means of communication, such as filing of paper copies, the latter must enclose an electronic support (DC/DVD/USB key). All files should, in principle, be submitted in PDF format.

All submissions must be accompanied by the relevant form. The Circular provides for four new types of forms: the Entry Form which must be filed with documents first filed for approval, the Notification Request Form for the purposes of passporting, the Filing Form which must be filed with the final terms and the Communication Form for filing final terms with the CSSF when Luxembourg is the host Member State. The New Circular outlines the information which must be contained in each of these forms and the documents which must be submitted with each file.

Circular 12/542 – Amending Circular 08/337 On The Entry Into Force Of The Law Of January 11th 2008 (The "Transparency Law") And Of The Grand-Ducal Regulation (The "Grand-Ducal Regulation") Of January 11th 2008 On Transparency Requirements For Issuers Of Securities.

On July 17th 2012 the CSSF published circular 12/542 (the "Amendment Circular") which amended and updated with immediate effect circular 08/337 of February 6th 2008 (the "Existing Circular"). The Amendment Circular was published following the introduction of the law of July 3rd 2012 (the "2012 Law") which transposed Directive 2010/73/EU of November 24th 2010.

The changes to the Existing Circular are as follows:

The explanation in the Existing Circular as to the scope of the Transparency Law and the Grand-Ducal Regulation has been amended to remove the reference to issuers of third countries that file the annual document provided for in Article 14 of the law of July 10th 2005 on prospectuses for securities with the CSSF, article 14 having been abrogated by the 2012 Law. The explanation in the Existing Circular as to the applicability of the periodic disclosure requirements provided for in the Transparency Law, has been amended to take account of the recent amendments thereto, namely: the exemption for issuers of debt securities to publish annual and half yearly financial reports and interim management statements is amended to apply to debt securities the denomination of which is at least EUR 100,000 rather than EUR 50,000. There is a grandfathering clause pursuant to which debt securities with a denomination of at least EUR 50,000 at the time of issuance remain exempt from such publication requirements provided that they were admitted to trading on a regulated market before December 31st 2010. Revised Rules & Regulations Of The Luxembourg Stock Exchange

The Luxembourg Stock Exchange (the "LxSE") has issued a new set of rules and regulations (Edition 2012/07), which replace those dated 2012/05 that entered into force in May 2012. Edition 2012/05 replaced the rules and regulations dated 2009/08 which entered into force on August 1st 2009. All terms used and not otherwise defined herein shall bear the meaning ascribed to them in Edition 2012/07 of the LxSE rules and regulations.

The most recent changes to the rules and regulations, included within Edition 2012/07 are as follows:

The exemption for Issuers of debt securities admitted to trading on the Euro MTF market to make available to the public its latest annual accounts and its latest management report, the publication of which is mandatory in accordance with the respective national law, has been amended to apply to bonds the denomination of which is at least EUR 100,000 rather than EUR 50,000 (Article 1003). The European Stability Mechanism has been added to the list of supranational institutions and organisations that are exempt from the obligation to publish a prospectus for the admission to trading on a market regulated by the LxSE. This list is set out in Appendix VII of the rules and regulations. Edition 2012/05 of the LxSE rules and regulations had previously incorporated the following changes with respect to market access arrangements in Part 3: a new Rule 3.3 of the rules and regulations was included to provide for the possibility for Members of the LxSE to provide Sponsored Access for their Clients, to a Securities Market of the LxSE and sets down the requirements in relation thereto. Sponsored Access is an access mode allowing a Client (the "Sponsored Participant") to make use of direct connectivity solutions to a Securities Market of the LxSE, subject to the consent and under the...