COVID-19: Luxembourg Regulatory Measures Relevant For Investment Funds

1. COVID-19: The CSSF allows swing pricing/dilution levy factors to be applied beyond the maximum percentage set forth in prospectuses

   In an FAQ update published on 20 March 2020, the CSSF stated that, in light of the current exceptional market conditions, they will allow for swing pricing/dilution levy factors to be applied at a percentage exceeding the maximum percentage set forth in the prospectus of UCITS, Part II funds and SIFs on a temporary basis. No prior CSSF authorization or notification is required.

   In case the prospectus does not specifically provide for the possibility for the indicated maximum percentage to be exceeded in exceptional market circumstances, the prospectus should be updated to that effect as soon as possible.

   A decision to apply a higher percentage must be (i) adequately justified (ii) based on a robust internal process and methodology that provides for an accurate NAV representative of prevailing market conditions and (iii) take into account the best interest of the investors.

   The decision to exceed the indicated maximum percentage must be notified to new and existing investors through the usual communication channels, such as a notice to shareholders, the fund's website or through any other means as referred to in the prospectus.

   The CSSF must be provided with a detailed notification of the decision to apply a higher percentage, including a specific explanation of the reasons for such decision.

   The CSSF may request, on an ex-post basis, a justification of the level of the swing factor applied and documentary evidence that it was at all times representative of the prevailing market conditions.

2. COVID-19: New measures to permit holding meetings of shareholders and management bodies exclusively in digital form.

   On 18 March 2020, the Luxembourg Government declared a state of emergency for a period of three months based on article 32(4) of the Luxembourg Constitution. Under the emergency powers granted by the Constitution, the Government has enacted by way of decree a number of temporary measures. These comprise new rules allowing all Luxembourg companies, private or listed, thus including investment funds in corporate form, to hold their shareholder meetings (including the annual general meeting) exclusively in digital form, without any participant attending in person. The same rules apply to meetings of management bodies such as boards of directors, boards of managers and supervisory boards. For more details...