CSSF Announces Transitional Measures For Luxembourg Managers And Funds Under AIFM Directive

Luxembourg's financial regulator, the Financial Sector Supervisory Authority (CSSF), has published a series of Frequently Asked Questions (FAQs) regarding the draft legislation that will implement the European Union's Alternative Investment Fund Managers Directive into national law and the European Commission's implementing regulation.

The CSSF has decided to publish the FAQs to provide managers with greater clarity on the impact of the directive, and especially provisions regarding the transitional period of a year up to July 22, 2014, even though Luxembourg's Chamber of Deputies has not yet voted the draft legislation into law.

The CSSF says the FAQs will be regularly updated and that it may if need be change its approach to some of the issues they deal with. This emphasises that the document is purely designed to provide guidance and does not offer managers legal certainty, especially before the draft bill is enacted into law.

The Commission's 'Level 2' delegated regulation, No 231/2013, was issued on December 19, 2012 and will have effect from July 22 this year, the deadline for transposition of the directive into the national law of EU member states.

Bill of law no. 6471, which transposes the AIFM Directive and also introduces the new Special Limited Partnership into Luxembourg law, was placed before parliament on August 24, 2012. The regulator says it expects the legislation to be adopted "in a near future", which is understood to mean before July 22, 2013.

When can managers start applying for authorisation under the AIFMD?

The CSSF has announced that it has been open to the submission of applications for authorisation as an alternative investment fund manager under the directive since March 1. It has provided details on its web site of the procedure for submission of an authorisation file at http://www.cssf.lu/en/forms/. Managers in activity before July 22 this year have until July 22, 2014 to submit an application for AIFMD authorisation to the CSSF.

Who qualifies for the CSSF's transitional provisions?

The regulator says in its FAQs that transitional provisions apply only to managers in existence and carrying out management of alternative funds before July 22, 2013. Managers that have not yet launched management activities must complete authorisation (or registration, if they are below the asset thresholds set out in the directive) before doing so.

Existing managers are required to take "all necessary measures" - that is, "expend...