Legal and technical
Investment funds, called Undertakings for Collective Investment (UCI), created under Luxembourg law can either be subject to the Law of 20 December 2002 relating to undertakings for collective investment (the 2002 Law) or to the Law of 13 February 2007 relating to specialised investment funds (the SIF Law).
The 2002 Law, which replaced the Law of 30 March 1988, is the transposition into Luxembourg law of the modifications that European Directives 2001/107/EC and 2001/108/EC brought to the original UCITS directive (Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities). Funds established under Part I of the 2002 Law comply with the UCITS Directive and hence benefit from a European passport, and they are freely marketable throughout the EU, provided local marketing requirements are met . By contrast, Part II investment funds – such as hedge funds, private equity funds, real estate funds and derivative investment funds – do not qualify for the European passport. Funds created under the 2002 Law may be sold to both retail and institutional investors. The latest amendments to the UCITS legislation, commonly known as UCITS IV, are included in Directive 2009/65/EC and must be implemented into national law by 1 July 2011.
The Specialised Investment Fund (SIF) law of 2007 provides a new regime for well-informed investors. Pursuant to article 2 of the SIF law, a well-informed investor means an institutional investor, a professional investor or any other investor who meets certain conditions.
Luxembourg investment funds are either created under a contractual form (fonds commun de placement, FCP) or a corporate form (société d’investissement à capital variable, SICAV and société d’investissement à capital fixe, SICAF respectively). These different legal entities may have one or more sub-funds, each with a different investment policy.
Investment companies in risk capital are regulated by the Law of 15 June 2004 (the SICAR Law) and designed for private equity and venture capital investments.
The brochure “Luxembourg Regulated Investment Vehicles” gives a detailed description of the legal and regulatory requirements applicable in Luxembourg.
The Legal Observatory of the Luxembourg Financial Sector (Codeplafi) provides a library of all Luxembourg legislation relating to the banking, finance and insurance sectors.
ALFI has published numerous guidelines and recommendations over the years.
ALFI has also prepared a trilingual list of those terms that are commonly used in the Luxembourg investment fund sector.