European Passport - SICAR and AIFM (ii) - #272-261*

Investment companies in risk capital (sociétés d’investissement en capital à risque - “SICARs”) qualifying as alternative investment funds (“AIFs”) and which are managed by an authorised European alternative investment fund manager (“AIFM”) benefit from a passport allowing AIFMs to market the SICARs’ shares and partnership interests to professional investors within the European Union through a regulator-to-regulator notification regime. 

References: Article 47(1) of the amended law of 15 June 2004 relating to SICAR; SICAR and AIFM (i), September 16, 2020, Bertrand Mariaux

*Podcast #272:

European Passport - SICAR and AIFM (ii) - #272-261* *Article #272-261 *YouTube Video 261| . . . . . . . .

*YouTube Video 261|: 

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 (RAIF) - #271-260*

As previously mentioned, a reserved alternative investment fund (a “RAIF”) may take the form of a common fund (“FCP” - fonds commun de placement). 

We also stated that a RAIF may take the form of an investment company with variable capital (société d'investissement à capital variable - “SICAV”). And finally the RAIF can take the form of an investment company with a fixed capital (société d’investissement à capital fixe - “SICAF”).

The FCP shall be managed by a management company as it has no legal personality. A SICAV or a SICAF may either be self-managed or appoint a management company. Self-managed SICAVs/SICAFs may only manage assets of their own portfolios and may not manage assets on behalf of a third party. The management company of an FCP must prepare the management regulations for the FCP.

References: the amended law of 23 July 2016 on RAIFs; What Are the Legal Forms of a RAIF?, August 29, 2020, Bertrand Mariaux.

*Podcast #271:

Management (RAIF) #271-260* *Article #271-260 *YouTube Video 260| . . . . . . . . #ImpactInvesting , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVenture , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #AIF , #AIFM , #AIFMD , #ResponsibleFinance Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 260|: 

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)

SICAR and AIFM (i) - #270-259*

An investment company in risk capital (société d’investissement en capital à risque - “SICAR”) that qualifies as alternative investment fund (“AIF”) is generally required to appoint an alternative investment fund manager (“AIFM”). 

The AIFM must either be:

• an AIFM established in Luxembourg authorised pursuant to the law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”) ; or, 

• an AIFM established in another EU Member State; or in,

• a third country authorised under Directive 2011/61/EU on Alternative Investment Fund Managers (The “AIFM Directive”).

References: Article 47(1) of the amended law of 15 June 2004 relating to SICAR; the AIFM Directive and Chapter 2 of the AIFM Law; What Is an Alternative Investment Fund?, September 15, Bertrand Mariaux.

*Podcast #270:

SICAR & AIFM (i) #270-259* *Article #270-259 *YouTube Video 259| . . . . . . . . #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 259|: 

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 an Alternative Investment Fund? - #269-258*

The law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”) defines the alternative investment fund (“AIF”). An AIF is simply a collective investment undertaking (including investment compartments), which:

1. raises capital from a number of investors with a view to investing it in accordance to a defined investment policy for the benefit of those investors; and 

2. does not require authorisation pursuant to the Directive 2009/65/EC relating to undertakings for collective investment in transferable securities (“UCITS”) (the “UCITS Directive”).

References: articles 1(39) of the AIFM Law and 5 of the UCITS Directive; Determination of the AIFM, August 27, 2020, Bertrand Mariaux.

*Podcast #269:

What Is an Alternative Investment Fund? #269-258* *Article #269-258 *YouTube Video 258| . . . . . . . . #ImpactInvesting , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVenture , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #AIF , #AIFM , #AIFMD , #ResponsibleFinance , #domiciliation Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 258|: 

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)

Financial Reports & Disclosure Obligations (SICAR) - #268-257*

An investment company in risk capital (société d’investissement en capital à risque - “SICAR”) shall draw up a prospectus. An annual report (for each financial year) shall also be produced. But a semi-annual report is not necessary.

Key information documents (“KID”) for packaged retail and insurance-based investment products (“PRIIPs”) are also required if retail investors can make investments. 

References: Article 23(1) of the amended law of 15 June 2004 relating to SICAR; Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on KID for PRIIPs; Authorisation and Supervision (SICAR), September 14, 2020, Bertrand Mariaux.

*Podcast #268:

Financial Reports & Disclosure Obligations #268-257* *Article #268-257 *Podcast #268 *YouTube Video 257| #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 257|: 

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)

Authorisation and Supervision (SICAR) - #267-256*

The investment company in risk capital (“SICAR”) must be authorised by the financial regulator (the Commission de Surveillance du Secteur Financier (“CSSF”)). A SICAR is supervised by the CSSF on an ongoing basis and is subject to regular reporting requirements. A SICAR shall be authorised only if the CSSF has approved its constitutional documents and the choice of the depositary. The amendments of the constitutional documents of the SICAR are subject to the approval by the CSSF. The CSSF levies a fee for the authorisation and supervision and keeps an official list of authorised SICARs. The list is published.

References: Articles 11(1), 12(1), (2), (4) & 13(1) of the amended law of 15 June 2004 relating to SICAR; Grand-ducal Regulation of 21 December 2017 relating to the fees to be levied by the Commission de Surveillance du Secteur Financier.

*Podcast #267:

Authorisation and Supervision (SICAR) #267-256* *Article #267-256 *YouTube Video 256| . . . . . . . . #ImpactInvesting , #avocat , #ServeAndThrive , #ThriveAndAccomplishYourMission , #MariauxAvocats , #SocialImpact , #impact , #ImpactSocial , #SocEnt , #MissionDriven , #MissionDrivenVenture , #EU , #DFI , #SocialVenture , #AssetManagement , #sustainability , #AlternativeInvestment , #SustainableFinance , #ResponsibleInvestment , #AIF , #AIFM , #AIFMD , #ResponsibleFinance , #domiciliation Any content published on MariauxAvocats.com does not constitute legal advice.

*YouTube Video 256|: 

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 form of a SICAR? - #266-255*

The investment company in risk capital (“SICAR”) may not be created in the form of a contract. The SICAR must be set up in the form of a corporate entity. Instruments of incorporation are required. The SICAR could have a fixed or a variable capital. Single fund or umbrella set-up (with multiple compartments) is possible. 

In the case of an umbrella fund, each compartment represents a distinct part of the SICAR’s assets and liabilities. The fund and the compartments are not limited as regards the number of classes of shares. This can then be tailored on investors’ needs or based on to whom the fund is distributed.

References: Articles 1(1) §1 and 3(2) of the amended law of 15 June 2004 relating to SICAR; Legal Framework (SICAR), September 11, 2020, Bertrand Mariaux.

*Podcast #266:

What is the legal form of a SICAR? #266-255* *Article #266-255 *YouTube Video 255| Any content published on MariauxAvocats.com does not constitute legal advice. Its sole purpose is to provide general information at the date of publication. Whenever necessary, it is preferable to seek advice from a licensed lawyer.

*YouTube Video 255|: 

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)

Legal Framework (SICAR) - #265-254*

An investment company in risk capital (société d’investissement en capital à risque - “SICAR”) is primarily governed by the amended law of 15 June 2004 relating to SICAR (the “SICAR Law”). The SICAR Law was amended by the Law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”). 

Indeed, there are two parts in the SICAR Law: 

• Part I refers to the general provisions applicable to all SICARs;

• Part II concerns the specific provisions applicable to SICARs qualifying as alternative investment funds (“AIFs”). AIFs are defined by the AIFM Law. AIFs must be managed by an alternative fund manager (“AIFM”). Most SICARs qualify as AIFs.

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

SICARs shall also comply with other pieces of legislation, at national and EU level (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; the EU Regulation 2017/1131 on money market funds; Determination of the AIFM, August 27, 2020, Bertrand Mariaux.

*Podcast #265:

Legal Framework (SICAR) #265-254* *Article #265-254 *YouTube Video 254| Any content published on MariauxAvocats.com does not constitute legal advice. Its sole purpose is to provide general information at the date of publication. Whenever necessary, it is preferable to seek advice from a licensed lawyer.

*YouTube Video 254|: 

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 Assets (SICAR) - #264-253*

An investment company in risk capital (société d’investissement en capital à risque - “SICAR”) must invest its assets in securities representing risk capital. 

The amended law of 15 June 2004 relating to SICAR (the “SICAR Law”) defines investment in risk capital.

Investment in risk capital is the (i) direct or indirect contribution of assets to (ii) entities; 

in view of their,

• launch;

• development; or 

• listing on a stock exchange.

References: Article 1(1) & (2) of the SICAR Law; Eligible Investors (SICAR), Septembre 8, 2020, Bertrand Mariaux.

*Podcast #264:

Eligible Assets (SICAR) #264-253* *Article #264-253 *YouTube Video 253| . . . . . . . .

*YouTube Video 253|: 

Eligible Assets (SICAR) #264-253* *Article #264-253 *Podcast #264 *YouTube Video 253|

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 (SICAR) - #263-252*

Investment in an investment company in risk capital (société d'investissement en capital à risque - “SICAR”) is reserved to “well-informed” investors. 

The amended law of 15 June 2004 relating to SICAR (the “SICAR Law”) defines well informed investors as: 

• institutional investors;

• professional investors; or

• any investor who meets the following conditions:

1. the investor has confirmed in writing that he adheres to the status of well-informed investor; and

2. the investor invests a minimum of 125,000€ in the SICAR, or

3. the investor has been assessed by: 

   • a credit institution;

   • an investment firm; or

   • a management company, which certifies his expertise, his experience and his knowledge in adequately appraising an investment in risk capital.

References: Article 2 §1 of the SICAR Law; Investment Company in Risk Capital (SICAR) - Introduction, September 7, 2020, Bertrand Mariaux.

*Podcast #263:

Eligible Investors (SICAR) - #263-252* *Article #263-252 *YouTube Video 252| . . . . . . . .

*YouTube Video 252|: 

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)