Luxembourg UCITS: Waiver Of The Requirement For A Promoter

In October 2012, the Luxembourg supervisory authority (the "CSSF") published a press release on the promotion of Luxembourg UCITS.

Until now, the CSSF required each Luxembourg UCITS to identify a promoter, in essence a deep pocket. The idea of a promoter was driven by investor protection considerations. Such promoter had to be approved by the CSSF. To be eligible, promoters had to have a sufficient financial surface and be regulated.

The CSSF's requirement for a promoter (and the very concept thereof) has been debated for some time and will now be abandoned.

This is the result of the increased demands imposed by CSSF Circular 12/546 on Luxembourg self-managed UCITS and UCITS management companies. The CSSF now considers that a self-managed UCITS or a UCITS management company ensures a high enough level of investor protection if it complies with such Circular.

Once the CSSF has confirmed to the self-managed UCITS or UCITS management company that it is in compliance with Circular 12/546, the entity acting as a promoter will be released from its obligations.

Since compliance with Circular 12/546 must be...