AIFM
Alternative Investment Fund Manager
The Luxembourg parliament passed on July 10th, 2013 the draft law aiming to enact the Alternative Investment Fund Managers Directive (AIFMD) into national law. In line with the AIFM Directive, the law lays down the rules applicable to the authorization, the scope of activities and the transparency requirements relating to Luxembourg alternative investment fund managers (AIFMs) managing and/or marketing alternative investment fund (AIFs). The main object of the Luxembourg’s Law is to regulate AIFMs and not directly AIFs.
1. Definition of Alternative Investment Fund
An AIF is a collective investment undertaking that is not subject to the UCITS regime, and includes hedge funds, private equity funds, retail investment funds, investment companies and real estate funds, among others.
2. Definition of Alternative Investment Fund Manager
An AIFM is any legal entity whose regular business is the management of one or more AIFs.
3. Potential Luxembourg AIFMs
The following regulated entities may potentially qualify as AIFM:
1. Management companies governed by Chapter 15 of the Law 2010;
2. Management companies governed by Chapter 16 of the Law 2010;
3. Internally managed UCIs under pat II of the Law 2010;
4. Internally managed SIFs under the Law 2007;
5. Internally managed SICARs under the Law 2004;
1. Management companies governed by Chapter 15 of the Law 2010;
2. Management companies governed by Chapter 16 of the Law 2010;
3. Internally managed UCIs under pat II of the Law 2010;
4. Internally managed SIFs under the Law 2007;
5. Internally managed SICARs under the Law 2004;
4. Authorisation Regime for AIFMs
Any Luxembourg entity qualifying as AIFM must be authorized under Chapter 2 of the Luxembourg Law 2013.
5. Impact to Luxembourg Management companies.
Luxembourg management companies will essentially be affected as follows.
5.1 UCITS Management Companies (Chapter 15)
A) Double license UCITS/AIFM
Chapter 15 of the UCI Law will continue to apply to UCITS management companies, which are in principle not impacted by the AIFM regime, unless they decide to manage AIFs in addition to UCITS (and other UCIs).
B) UCITS/AIFMD passport The EU passport under both UCITS and AIFMD regimes will be available for UCITS management companies cumulating the UCITS and AIFM licenses, provided that certain conditions are complied.
B) UCITS/AIFMD passport The EU passport under both UCITS and AIFMD regimes will be available for UCITS management companies cumulating the UCITS and AIFM licenses, provided that certain conditions are complied.
5.2 Non-UCITS Management Companies (Chapter 16)
Chapter 16 of the UCI Law will continue to apply to non-UCITS management companies, but will be significantly amended so as to introduce a distinction between:
a) non-UCITS management companies without AIFM status
b) non-UCITS management companies with AIFM status.
a) non-UCITS management companies without AIFM status
b) non-UCITS management companies with AIFM status.
5.2.1 Non-UCITS Management Companies without AIFM Status
In principle, these management companies, which do not qualify as AIFMs, will remain regulated entities authorised by the CSSF under the UCI Law only.
5.2.2 Non-UCITS Management Companies with AIFM Status
In addition to their authorisation by the CSSF as management company under the UCI Law, these management companies will, due to their AIFM status, be subject to AIFM licence according to Chapter 2 of the AIFM Law.
6. Grandfathering Provisions
According to the AIFM Law (art. 58) any legal person performing AIFM's activities within the meaning of the AIFM Law before July 22nd 2013 must fully comply with the AIFM Law and shall submit an application for authorisation as AIFM with the CSSF by July 22nd 2014.