Administration & Services (UCI Part II Fund) - #302-291*

We briefly discussed safekeeping for a fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment (a “UCI Part II Fund”). Let’s now continue to the other important administrative and professional services aspects that must be kept in mind when setting up a UCI Part II Fund. 

First, the conducting officers (dirigeants) of the depositary and of the UCI Part II Fund must be of sufficiently good repute and have sufficient experience. Likewise, the directors (or the directors of the general partner) of the  UCI Part II Fund must be of sufficiently good repute and have sufficient experience for performing their functions. The so-called: “Fit and Proper Test” (by the CSSF) takes place. 

UCI Part II Fund must have the accounting information provided in their annual report audited by an approved statutory auditor (réviseur d’entreprises agréé). Service providers also include lawyers, domiciliation agents, management companies (portfolio and risk management...), investment advisers, distributors and paying agents. 

Finally, the law states that a UCI Part II Fund shall be deemed to be established in Luxembourg if the registered office of the management company of the common fund or the registered office of the investment company is established in Luxembourg. 

References: 129(5), 145(1)(re liquidators), 155(1) - PART V: GENERAL PROVISIONS APPLICABLE TO UCITS AND OTHER UCIS, 88 of the amended law of 17 December 2010 relating to undertakings for collective investment; How to set up a UCI Part II Fund, Luxembourg for Finance, January 2019; Safekeeping (UCI Part II Fund) October 18, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

*Podcast #302:

To see this article, go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum. Subscribe to: Bertrand Mariaux Avocats' YouTube channel; & Podcast THE LAW & IMPACT PODCAST | Le PODCAST DU DROIT & DE L'IMPACT - https://mariauxavocats.com/podcast Connect with Bertrand on: LinkedIn @BertrandMariaux; Facebook @BertrandMariaux; & Instagram / IGTV @ThriveAndAccomplishYourMission Follow us on: LinkedIn @BertrandMariauxAvocats; Facebook @MariauxAvocats; & Twitter: @BertrandMariaux Administration & Services (UCI Part II Fund) #302-291* *Article #302-291* *Podcast #302 *YouTube Video 291* .

*YouTube Video 291|: 

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 (UCI Part II Fund) - #301-290*

The custody of the assets of a fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment (a “UCI Part II Fund”) must be entrusted to a depositary, as stated by the legislator. The depositary shall be a credit institution within the meaning of the Law of 5 April 1993 on the financial sector, as amended.

References: Articles 88-3, 17(1), 33(1) of the amended law of 17 December 2010 relating to undertakings for collective investment; Management (UCI Part II Fund) October 17, 2020, Bertrand Mariaux.

Editor: Hannah Seulgee Jung

*Podcast #301:

To see this article, go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum. Subscribe to: Bertrand Mariaux Avocats' YouTube channel; & Podcast THE LAW & IMPACT PODCAST | Le PODCAST DU DROIT & DE L'IMPACT - https://mariauxavocats.com/podcast Connect with Bertrand on: LinkedIn @BertrandMariaux; Facebook @BertrandMariaux; & Instagram / IGTV @ThriveAndAccomplishYourMission.

*YouTube Video 290|: 

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 (UCI Part II Fund) - #300-289*

As previously described, a fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment (a “UCI Part II Fund”) may take the form of either an open or closed ended: 

• common contractual fund (fonds commun de placement - “FCP”); 

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

An FCP must be managed by a management company. The management company shall draw up the management regulations for the common funds. 

The SICAV/SICAF has the choice to be self-managed or to have a management company. If the SICAV/SICAF is self-managed, whereby its board of directors or the general partner is entrusted with the functions usually devoted to a management company (risk management, portfolio management etc.), it can only manage assets of its own portfolio. It is therefore not possible for a self-managed SICAV/SICAF to manage the assets of a third-party.

References: Article 13(1) of the amended law of 17 December 2010 relating to undertakings for collective investment; How to set up a UCI Part II Fund, Luxembourg for Finance, January 2019; Which Legal Forms May Take a UCI Part II Fund? October 11, 2020, Bertrand Mariaux.

*Podcast #300:

Go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum Subscribe to: Bertrand Mariaux Avocats' YouTube channel; & Podcast THE LAW & IMPACT PODCAST | Le PODCAST DU DROIT & DE L'IMPACT - https://mariauxavocats.com/podcast Connect with Bertrand on: LinkedIn @BertrandMariaux; Facebook @BertrandMariaux; & Instagram / IGTV @ThriveAndAccomplishYourMission.

*YouTube Video 289|: 

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 Passport - UCI Part II Fund and AIFM (ii) - #299-288*

A fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment (a “UCI Part II Fund”) may qualify as an alternative investment fund (“AIF”). The AIF is managed by a licensed alternative investment fund manager (“AIFM”). The UCI Part II Fund then benefits from a passport allowing the AIFM to market the fund’s shares and partnership interests to professional investors within the European Union through a regulator-to-regulator notification regime. 

References: the amended law of 17 December 2010 relating to undertakings for collective investment; How to set up a UCI Part II Fund, Luxembourg for Finance, January 2019; UCI Part II Fund and AIFM (i), October 14, 2020, Bertrand Mariaux.

*Podcast #299:

Go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum Subscribe to: Bertrand Mariaux Avocats' YouTube channel; & Podcast THE LAW & IMPACT PODCAST | Le PODCAST DU DROIT & DE L'IMPACT - https://mariauxavocats.com/podcast Connect with Bertrand on: LinkedIn @BertrandMariaux; Facebook @BertrandMariaux; & Instagram / IGTV @ThriveAndAccomplishYourMission.

*YouTube Video 288|: 

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 - UCI Part II Fund - #298-287*

A fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment (“UCI Part II Fund”) may qualify as a European Social Entrepreneurship Fund (“EuSEF”) or as a European Venture Capital fund (“EuVECA”). It may thus be subject to the EuSEF or EuVECA legislation. Both regimes benefit from the European passport which allows 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.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung

*Podcast #298:

Go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum Subscribe to: Bertrand Mariaux Avocats' YouTube channel; & Podcast THE LAW & IMPACT PODCAST | Le PODCAST DU DROIT & DE L'IMPACT - https://mariauxavocats.com/podcast Connect with Bertrand on: LinkedIn @BertrandMariaux; Facebook @BertrandMariaux; & Instagram / IGTV @ThriveAndAccomplishYourMission.

*YouTube Video 287|: 

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)

UCI Part II Fund and AIFM (i) - #297-286*

A fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment is commonly known as a UCI Part II Fund. A UCI Part II Fund qualifying as an alternative investment fund (an “AIF”) is generally required to appoint an alternative investment fund manager (an “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 88-2(1) of the amended law of 17 December 2010 relating to undertakings for collective investment and Chapter 2 of the AIFM Law; What Is the Legal Framework for a UCI Part II Fund? October 9, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung

*Podcast #297:

Go to our blog The VADE-MECUM - https://mariauxavocats.com/vademecum Subscribe to: Bertrand Mariaux Avocats' YouTube channel; & Podcast THE LAW & IMPACT PODCAST | Le PODCAST DU DROIT & DE L'IMPACT - https://mariauxavocats.com/podcast Connect with Bertrand on: LinkedIn @BertrandMariaux; Facebook @BertrandMariaux; & Instagram / IGTV @ThriveAndAccomplishYourMission.

*YouTube Video 286|: 

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 (UCI Part II Funds) - #296-285*

The law states that the investment company and the management company, for each of the common funds they manage, shall publish:

• a prospectus;

• an annual report for each financial year; and

• a half-yearly report covering the first six months of the financial year.

The law also states that the annual and half-yearly reports shall be published within the following time limits, with effect from the end of the periods to which they relate:

• six months in the case of the annual report,

• three months in the case of the half-yearly report.

Schema A of Annex I of the amended law of 17 December 2010 relating to undertakings for collective investment (the “UCI Law”) and chapter L of the IML Circular 91/75 as amended, detail the content of the prospectus.

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

References: Articles 150(1) and (2) of the UCI Law; Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on KID for PRIIPs; IML Circular 91/75 as amended; Authorisation and Supervision (UCI Part II Fund); October 12, 2020, Bertrand Mariaux.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung

*Podcast #296:

Go to: https://mariauxavocats.com/vademecum Subscribe to our YouTube channel: Bertrand Mariaux Avocats; and to our podcast: The Law & Impact Podcast | Le Podcast du droit et de l'impact Follow us on LinkedIn & Facebook: @BertrandMariauxAvocats ; @MariauxAvocats Instagram: @ThriveAndAccomplishYourMission Twitter: @BertrandMariaux Financial Reports & Disclosure Obligations (UCI Part II Funds) #296-285* *Article #296-285* *YouTube Video 285* .

*YouTube Video 285|: 

Go to: https://mariauxavocats.com/vademecum Subscribe to our YouTube channel: Bertrand Mariaux Avocats; and to our podcast: The Law & Impact Podcast | Le Pod...

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 (UCI Part II Fund) - #295-284*

A fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment (“UCI Part II Fund”) must be authorised by the financial regulator (the Commission de Surveillance du Secteur Financier - the “CSSF”).

A UCI Part II Fund shall be authorised only if the CSSF has approved the instruments of incorporation and the offering documentation as well as the choice of the depositary. UCI Part II Fund shall send their prospectuses and any amendments thereto, as well as their annual and half-yearly reports, to the CSSF.

The CSSF thus supervises a UCI Part II Fund on an ongoing basis. A UCI Part II Fund is subject to regular reporting requirements. The CSSF levies a fee for the authorisation and supervision and keeps an official list of authorised management companies. 

Lawyers or bankers are generally involved in the submission of the application to the CSSF.

References: Chapter 19 (articles 129-132) of the amended law of 17 December 2010 relating to undertakings for collective investment (the “UCI Law”) is dedicated to the question of authorisation; and more specifically: Articles 129(1), (2) and 155(1) of the UCI Law; Grand-ducal Regulation of 21 December 2017 relating to the fees to be levied by the Commission de Surveillance du Secteur Financier; Chapter K of IML Circular 91/75 as amended; Which Legal Forms May Take a UCI Part II Fund?, October 11, 2020, Bertrand Mariaux; How to set up a UCI Part II Fund, Luxembourg for Finance, January 2019.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung

*Podcast #295:

*YouTube Video 284|: 

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 a UCI Part II Fund? - #294-283*

As previously touched on, a fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment (“UCI Part II Fund”) can take the form of either an open or closed ended: 

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

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

A SICAV or a SICAF would typically be set-up as a Public Limited Liability Company (société anonyme) or as a Corporate Partnership Limited by Shares (société en commandite par actions).

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 of 17 December 2010 relating to undertakings for collective investment; What Is the Legal Framework for a UCI Part II Fund? October 9, 2020, Bertrand Mariaux; How to set up a UCI Part II Fund, Luxembourg for Finance, January 2019.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung

*Podcast #294:

Go to: https://mariauxavocats.com/vademecum Subscribe to our YouTube channel: Bertrand Mariaux Avocats; and to our podcast: The Law & Impact Podcast | Le Podcast du droit et de l'impact Follow us on LinkedIn & Facebook: @BertrandMariauxAvocats ; @MariauxAvocats Instagram: @ThriveAndAccomplishYourMission Twitter: @BertrandMariaux Which Legal Forms May Take a UCI Part II Fund?

*YouTube Video 283|: 

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 of a UCI Part II Fund? - #293-282*

A fund set up under Part II of the amended law of 17 December 2010 relating to undertakings for collective investment (a “UCI Part II Fund”) 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. This minimum shall be reached within a period of 6 months following the authorisation of the common fund.

The share capital of a SICAV may not be less than EUR 1,250,000. This minimum shall be reached within a period of 6 months following the authorisation of the SICAV.

The minimum capital of a SICAV which has not designated a management company may not be less than EUR 300,000 at the time of authorisation. The capital of any SICAV including SICAVs which have designated a management company shall reach EUR 1,250,000 within a period of 6 months following the authorisation of the SICAV.

References: articles 23§1 and §2, 27(1), 94 of the amended law of 17 December 2010 relating to undertakings for collective investment; What Is the Legal Framework for a UCI Part II Fund?, October 9, 2020, Bertrand Mariaux; How to set up a UCI Part II Fund, Luxembourg for Finance, January 2019.

Contributor: Cédric Buisine, Avocat

Editor: Hannah Seulgee Jung 

*Podcast #293:

Go to: https://mariauxavocats.com/vademecum Subscribe to our YouTube channel: Bertrand Mariaux Avocats and to our podcast: The Law & Impact Podcast | Le Podcast du droit et de l'impact Follow us on LinkedIn & Facebook: @BertrandMariauxAvocats ; @MariauxAvocats Instagram: @ThriveAndAccomplishYourMission Twitter: @BertrandMariaux What Is the Capital Base of a UCI Part II Fund?

*YouTube Video 282|: 

Go to: https://mariauxavocats.com/vademecum Subscribe to our YouTube channel: Bertrand Mariaux Avocats and to our podcast: The Law & Impact Podcast | Le Podc...

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)