CSSF Communicates Expected Conversion Of EMIR In The Fund Industry

On 23 August 2018, the Commission de Surveillance du Secteur Financier (CSSF) published Circular 18/698 (see our blog article) on the authorization and organization of investment fund managers incorporated under Luxembourg law. As part of the document, the CSSF as supervisory authority outlines requirements for Management Companies (ManCos) under the European Market Infrastructure Regulation (EMIR). The Circular entered into force directly with its publication.

Detailed requirements

EMIR requires ManCos to fulfill regulatory requirements in case the funds under their management are counterparties to derivative transactions. For this reason, the CSSF requires ManCos to have documented corresponding processes and procedures. If a ManCo has delegated these (risk management) processes, it should instead have procedures that guarantee the overview of the delegate. This is especially important since the responsibility for (EMIR) compliance remains with the ManCo.

A comprehensive delegation overview encompasses the review of contractual documents, such as Service Line Agreements (SLAs), an initial due diligence of...