AIFMD in Luxembourg: Passporting Regime & Reporting Timetable

Over the last 25 years Luxembourg has built up its position as the most popular domicile for undertakings for collective investments in transferable securities (“UCITS”).  At the same time Luxembourg has developed a strong track record in alternative investment funds structure such as hedge funds and funds of hedge funds, private equity vehicles and real estate funds.
 
As of 22 July 2014 – deadlinefor
lodging applications for authorisation – the Luxembourg Commission de Surveillance du Secteur Financier (“CSSF”) - had received a total of 773 applications submitted in accordance with the Luxembourg law of 12 July 2013 on Alternative Investment Fund Managers (the “AIFM Law”) with a total of 215 requests to be approved as Alternative Investment Funds Manager (“AIFM”) and 558 requests for registration of AIFM. 
 
Out of the 215 requests, 151 entities have been approved as AIFMs from the 22 July 2014 deadline. 
According to the CSSF, those who are still awaiting authorisation are linked to entities, which were not active in the field of alternative investment funds before 22 July 2013 and are not subject to the provisions of the transactional period. 
 
In relation to the 215 requests, 105 were from existing UCITS management companies, 48 from non-UCITS management companies and 62 from other existing or newly created entities. 
 
A total of 487 entities have been granted the status of registered AIFM under the provisions of Article 3(2) of the AIFM Law as of 22 July 2014.  The remaining 71 applications for registration are either incomplete as of the 22 July 2014 deadline or have been withdrawn by the applicant. 
 
Existing non-UCITS management companies that have not applied for authorisation or registration in Luxembourg have designated, or are in the process of designating, a third-party AIFM established within the EU.
 
The CSSF published on 18 July 2014 its latest update to its Frequently Asked Questions (“FAQ”) document on the AIFM Law concerning the implementation of the AIFM Directive 2011/61/EU of 8 June 2011 on Alternative Investment Fund Managers (“AIFMD”). 
 
The FAQ document highlights key aspects of the AIFMD rules from a Luxembourg perspective and for the purposes of alternative funds and managers established in the Grand-Duchy of Luxembourg.  It covers the scope of the AIFM Law, the authorisation and registration (for managers below the assets under management thresholds) regimes, delegation requirements, entry into force of the law and transitional provisions, the scope of authorised managers’ activities, depositary rules, the application of the AIFMD passport to Luxembourg managers and funds and to foreign managers marketing in Luxembourg, reporting, valuation, transaction costs, and co-operation agreements signed by the CSSF with non-EU regulators.
 
AIFMD Passporting Regime
 
EU AIFMs marketing EU Alternative Investment Funds now have access to an EU wide passport to market these Alternative Investment Funds (“AIF”) to professional investors.  There is however, no passport available for AIFs managed by non-EU AIFMs or for non-EU AIFs managed by EU AIFMs until at least 2016.  Therefore it will be necessary to comply with national private placement regimes introduced under AIFMD to market such AIFs in the EU, except in cases of genuine reverse solicitation. 
 
The FAQ document sets out the Luxembourg rules for marketing alternative funds to professional investors in Luxembourg by non-EU managers.  They may carry out such marketing without a passport, but must inform the CSSF when they start (and also stop), and are subject to reporting requirements under Article 45 of the AIFM Law (referring to Articles 22, 23 and 24 of the AIFMD), but only in respect of funds marketed in Luxembourg.  The reporting requirement applies to both regulated and non-regulated Luxembourg funds.  Once the AIFMD passport will be available to non-EU managers, they will be required to report to the regulator of their member state of reference.
 
Reporting Timetable
 
The new version of the FAQ document primarily updates information regarding reporting requirements, in conjunction with ESMA’s Reporting Guidelines and its Opinion on Reporting under Article 24(5) of the AIFMD.  The guidelines recommend that reporting periods for AIFMs be aligned with the calendar year, with quarterly, half-yearly or annual reporting periods depending on the requirements applicable to the particular manager.
 
AIFMs authorised after the entry into force of the directive on 22 July 2013, but before 30 June 2014, must submit their first reporting statement for the period starting 1 July 2014 by the end of October 2014 for those subject to quarterly reporting, or by the end of January 2015 for those reporting half-yearly and annually.  AIFMs authorised between 1 and 22 July 2014 must submit their first reporting, for the period from October 1 to 31 December 2014 by 31 January 2015.  The deadlines for funds of funds are 15 days later, to allow the gathering of data reported by underlying funds.
 
Managers of funds with assets below the authorisation threshold that received confirmation of registration in 2013 must report for 2014 by 31 January 2015, or 15 February for funds of funds.  Those registered in 2014 must begin reporting as of the quarter following registration for a period up to the end of the calendar year (2015 for managers registered in the fourth quarter), and file their report by the end of the following January, or February 2015 for funds of funds.
 
LEXFIELD is a Luxembourg business law firm focused on investment management, corporate, tax and finance laws.
 
LEXFIELD
Jonathan Burger
Investment Management Partner
+352 260 082 50
jburger@lexfield.com
www.lexfield.com