Authorisation and Supervision (SIF) - #283-272*

Specialised investment funds (“SIFs”) must be authorised by the financial regulator (the Commission de Surveillance du Secteur Financier - the “CSSF”). A SIF shall be authorised only if the CSSF has approved its constitutive documents and the choice of the depositary. SIFs must submit their offering document and any amendments thereto, as well as their annual report, to the CSSF. 

The CSSF supervises a SIF on an ongoing basis, which is subject to regular reporting requirements.  

The CSSF levies a fee for the authorisation and supervision and keeps an official list of authorised SIFs. Lawyers or bankers are generally involved in the submission of the application to the CSSF.

References: Articles 42(1), (2) and 43(1) of the amended law on SIF of 13 February 2007; Grand-ducal Regulation of 21 December 2017 relating to the fees to be levied by the Commission de Surveillance du Secteur Financier; Which Legal Forms May take the SIF? September 28, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung 

*Podcast #283:

Authorisation and Supervision (SIF) #283-272* *Article #283-272* *YouTube Video 272| . . . . . . . .

*YouTube Video 272|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Which Legal Forms May take the SIF? - #282-271*

As previously touched on, a specialised investment fund (“SIF”) can take the form of either: 

• an open or closed ended common contractual fund (fonds commun de placement - “FCP”); or

• an open or closed ended investment company with variable capital (société d’investissement à capital variable - “SICAV”), or fixed capital (société d’investissement à capital fixe - “SICAF”).

An FCP or a SICAV / SICAF could be set up as an umbrella fund with multiple compartments or as a single fund. The single fund or the umbrella fund may have an unlimited number of shares / unit classes (issued against the fund or a dedicated compartment of an umbrella fund) - depending on the needs of the investor to whom it is distributed.

References: the amended law on SIF of 13 February 2007; What Is the Legal Framework for a SIF? September 27, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung 

*Podcast #282:

Which Legal Forms May take the SIF? #282-271* *Article #282-271* *YouTube Video 271| . . . . . . . . #ImpactFinance , #ServeAndThrive , #lawyer , #ThriveAndAccomplishYourMission , #MariauxAvocats , #ImpactInvesting , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVentureCapital , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #ResponsibleFinance , #domiciliation , #SIF Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 271|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

What Is the Capital Base for a SIF? - #281-270*

A specialised investment fund (“SIF”) can be constituted as either: 

• an open or closed ended common fund (fonds commun de placement - “FCP”); or 

• an open or closed ended investment company with variable capital (société d’investissement à capital variable - “SICAV”) or fixed capital (société d’investissement à capital fixe - “SICAF”).

The net assets of an FCP may not be less than EUR 1,250,000.

The subscribed capital of a SICAV, increased by the share premium or the value of the amount constituting partnership interests, may not be less than EUR 1,250,000. This minimum must be reached within a period of twelve months following the registration of the SICAV. The capital of a SICAV must be entirely subscribed, and at least 5% of the subscription amount for shares or units must be paid up in cash or by means of a contribution other than cash.

The subscribed capital, increased by the share premium, of a SIF not constituted as an FCP or a SICAV shall also be at least EUR 1,250,000. If the SIF is constituted under a statutory form, its capital must be entirely subscribed and at least 5% of each share or unit must be paid up in cash or by means of a contribution other than cash.

References: Articles 21, 27, 28(3), 39(1) & (6) of the amended law on SIF of 13 February 2007; Eligible Investors (SIF), September 26, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung 

*Podcast #281:

What Is the Capital Base for a SIF? #281-270* *Article #281-270 *YouTube Video 270| . . . . . . . . #ImpactFinance , #ServeAndThrive , #lawyer , #ThriveAndAccomplishYourMission , #MariauxAvocats , #ImpactInvesting , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVentureCapital , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #ResponsibleFinance , #domiciliation , #SIF Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 270|:

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

What Is the Legal Framework for a SIF? - #280-269*

A specialised investment fund (“SIF”) is primarily governed by the amended law on SIF of 13 February 2007 (the “SIF Law”). The SIF Law was amended by the Law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”). There are two parts in the SIF Law: 

• Part I refers to the general provisions applicable to SIFs; and

• Part II concerns the specific provisions applicable to SIFs managed by an alternative investment fund manager (“AIFM”). Most SIFs qualify as alternative investment funds (“AIFs”) because of the broad definition of an AIF.

Another piece of legislation must be applied especially if SIFs invest in short-term assets and have distinct objectives offering returns in accordance with money market rates or where SIFs intend to preserve the value of the investment. A SIF must then comply with the EU Regulation 2017/1131 on money market funds.

SIFs shall also comply with applicable national regulation(s), as well as EU regulations (on anti-money laundering, the amended markets in financial instruments Directive (The “MIFID II”), market abuse, derivatives, securities and general corporate law).

References: Articles 1(39) and 4(1) of the AIFM Law; What Is an Alternative Investment Fund? September 15, 2020, Bertrand Mariaux; Determination of the AIFM, August 27, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung 

*Podcast #280:

What Is the Legal Framework for a SIF? #280-269* *Article #280-269 *YouTube Video 269| . . . . . . . .

*YouTube Video 269|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Eligible Investors (SIF) - #279-268*

As previously discussed the specialised investment fund (the “SIF”) is reserved to well-informed investors. Well-informed investors are:

• institutional investors;

• professional investors; or 

• any other investors who meets the following conditions:

• she/he has confirmed in writing that he adheres to the status of a well-informed investor; and

• she/he invests a minimum of EUR 125,000 in the SIF; or

• she/he has been assessed by: 

• a credit institution;

• an investment firm;

• a management company;

certifying her/his 

• expertise, 

• experience; and 

• knowledge,

in adequately appraising an investment in the SIF.

The last category is frequently used by high-net-worth individuals (HNWI).

These conditions are not applicable to directors or other persons who intervene in the management of the SIF.

References: Article 2(1) & (2) of the amended law on SIF of 13 February 2007; Specialised Investment Fund (SIF), September 25, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

*Podcast #279:

Eligible Investors (SIF) #279-268* *Article #279-268 *Podcast #279 *YouTube Video 268| . . . . . . . .

*YouTube Video 268|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Specialised Investment Fund (SIF) - #278-267*

A specialised investment fund (“SIF”) is a multipurpose vehicle which can be used for all asset classes. It provides flexibility and fiscal efficiency. It usually qualifies as an alternative investment fund (“AIF”). The SIF is reserved to one or several well-informed investors (as defined by the law). SIFs that have appointed an EU alternative investment fund manager (“AIFM”) can market their securities or partnership interests across the European Union.

References: Article 1(1) of the amended SIF law of 13 February 2017; Which Structures Are Mainly Used in Impact Finance?, August 21, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

*Podcast #278:

Specialised Investment Fund (SIF) #278-267* *Article #278-267 *YouTube Video 267| . . . . . . . . #ImpactFinance , #ImpactInvesting , #attorney , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVenture , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #AIF , #AIFM , #AIFMD , #ResponsibleFinance , #domiciliation , #SIF Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 267|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Administration & Services (SICAR) - #277-266*

We discussed safekeeping lodged into an investment company in risk capital (société d’investissement en capital à risque - “SICAR”). Let’s now continue to the other important administrative and professional services aspects that must be kept in mind when setting-up a SICAR. The directors of the SICAR must be of sufficiently good repute and have sufficient experience for performing their functions (the so-called “Fit and Proper Test” conducted by the CSSF). The SICARs must have the accounting information provided in their annual report audited by an approved statutory auditor (réviseur d’entreprises agréé). Other typical service providers include lawyers, domiciliation agents, management company (portfolio and risk management…), investment advisers, distributors and paying agents. 

References: Article 12(3) and 27(1) §1 of the amended law of 15 June 2004 on SICAR ; Safekeeping (SICAR), September 23, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat à la Cour

*Podcast #277:

Administration & Services (SICAR) #277-266* *Article #277-266 *YouTube Video 266| . . . . . . . . #ImpactInvesting , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVenture , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #AIF , #AIFM , #AIFMD , #ResponsibleFinance , #domiciliation , #SICAR Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 266|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Safekeeping (SICAR) - #276-265*

The custody of the assets of an investment company in risk capital (société d’investissement en capital à risque - “SICAR”) must be entrusted to a Luxembourg depositary. 

Under the scope of the amended law of 1993 on the financial sector, the depositary shall be:

• a credit institution; or 

• an investment firm.

It is important to note that the investment firm must fulfill the attributes of an eligible depositary pursuant to the law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”).

Under certain conditions, the depositary may also be a depositary of assets other than financial instruments.

References: Articles 8(1), (2), (3) of the SICAR law; Management (SICAR), September 21, 2020, Bertrand Mariaux.

*Podcast #276:

Safekeeping (SICAR) #276-265* *Article #276-265 *YouTube Video 265| . . . . . . . .

*YouTube Video 265|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

Management (SICAR) - #275-264*

An investment company in risk capital (société d’investissement en capital à risque - “SICAR”) may qualify as an alternative investment fund (“AIF”). It can be managed by a management company or be self-managed. A SICAR qualifying as an AIF is generally required to appoint an alternative investment fund manager (“AIFM”). A self-managed SICAR may only manage assets of their own portfolios and may not manage assets on behalf of a third party. A SICAR shall have its central administration in Luxembourg.

References: Article 47, 12(1) & (5) of the amended law of 15 June 2004 relating to SICAR; Article 4(1) of the law of 12 July 2013 on AIFM; SICAR and AIFM (i), September 16, 2020, Bertrand Mariaux.

*Podcast #275:

Management (SICAR) #275-264* *Article #275-264 *YouTube Video 264| . . . . . . . .

*YouTube Video 264|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)

European Social Entrepreneurship & European Venture Capital Funds (SICAR) - #274-263*

Investment companies in risk capital (sociétés d’investissement en capital à risque - “SICARs”) qualifying as European Social Entrepreneurship Funds (“EuSEF”) or European Venture Capital (“EuVECA”) funds have the option of being subject to the EuSEF and EuVECA legislation. Both regimes benefit from the European passport which permits the marketing of the fund to EU-based eligible investors. 

References: Loi du 16 juillet 2019 portant mise en oeuvre des règlements EuVECA, EuSEFs, fonds monétaires (Money Market Fund - MMF), fonds européens d’investissement à long terme (European Long Term Investment Fund - ELTIF) et titrisations simples, transparentes et standardisées (Titrisation STS); Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds; Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds (Text with EEA relevance); Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013 on European venture capital funds (Text with EEA relevance); European Investment Funds Initiatives - Impact Finance, August 22, 2020, Bertrand Mariaux; Which Structures Are Mainly Used in Impact Finance?, August 21, 2020, Bertrand Mariaux.

*Podcast #274:

European Social Entrepreneurship & European Venture Capital Funds - SICAR - #274-263* *Article #274-263 *Podcast #274 *YouTube Video 263| . . . . . . . .

*YouTube Video 263|: 

Bertrand Mariaux, Avocat à la Cour, LL.M. (hons.)

Prestation de serment (Swearing-in oath): Luxembourg (2011), Certificat d’Aptitude à la Profession d’Avocat, École de Formation professionnelle des Barreaux de la Cour d’appel de Paris (2009), Bond University (LL.M. (distinct.), International Legal Practice, 2010), Université Sorbonne Paris Nord & University of Limerick (Master in European & International Law - major in economics, 2008), certified Expert in Microfinance (Frankfurt School of Finance & Management, 2015), social entrepreneurship (University of Oxford, 2015 & The Wharton School of Social Policy & Practice, 2014) and social & solidarity economy (International Labour Organization Academy - Social & Solidarity Economy, Organisation Internationale du Travail - Économie Sociale et Solidaire, 2017)