The Board of Directors of the Association of the Luxembourg Fund Industry (ALFI), has appointed Freddy Brausch, Partner at Linklaters LLP in Luxembourg, as Vice-Chairman focusing on National Affairs and Michael Ferguson, Partner at EY Luxembourg, as Vice-Chairman focusing on International Affairs. The Board of Directors furthermore renewed the mandate of Julien Zimmer, General Manager Investment Funds at DZ Privatbank S.A., as Treasurer of the association.
The Chairman, the Vice-Chairmen, the Treasurer and the Director General form ALFI’s Executive Committee.
Freddy Brausch is the Managing Partner of Linklaters LLP in Luxembourg and has been a partner in the Investment Management Group since 1988.
Michael Ferguson is the EY EMEIA Regulated Funds Practice and Luxembourg Wealth & Asset Management Leader. He has an experience of more than 30 years in the investment fund industry in Luxembourg, Ireland, the UK and the US.
Julien Zimmer is the General Manager Investment Funds in charge of coordinating the DZ PRIVATBANK S.A.’s Investment Fund Business and has been actively involved in the industry since 1983.
ALFI responded to the OECD Public Revised Discussion Draft “BEPS Action 6: Preventing Treaty Abuse” dated 22 May 2015.
ALFI has taken note of the OECD Revised Discussion Draft “BEPS Action 6: Prevent Treaty Abuse” dated 22 May 2015. This follows a previous consultation “Follow up Work on BEPS Action 6: Preventing Treaty Abuse” to which ALFI responded on 9 January 2015 (click here to access the previous response). These two consultations must be read in conjunction with the report “BEPS Action 6: Preventing the Granting of Treaty Benefits in Inappropriate Circumstances”.
ALFI’s response addresses the situation of collective investment vehicles (“CIVs”) being widely-held, diversified, and subject to investor-protection regulation in the country of establishment of the CIV, as previously defined by the 2010 OECD report on treaty eligibility for investors in CIVs and section A of the Follow-up Discussion Draft relating to the limitation-on-benefits (LOB) provision and treaty entitlement.
ALFI again takes the view that CIVs set-up as UCITS or non-CIVS with similar characteristics should automatically qualify as resident under article 1 of the OECD Model Tax Convention as well as for the LOB rule. CIVs and UCITS are principally set up for genuine commercial reasons and given their economic characteristics it is reasonable to conclude that CIVs cannot, in principle, be effectively used for treaty shopping.
Finally, ALFI also suggests to include a statement that Contracting States are encouraged to consider that UCITS and comparable non-CIVs will not be considered as creating opportunities for treaty shopping.
You may access ALFI’s response here.
It is a regulatory requirement that the board of a Fund, the Management Company or the Alternative Investment Fund Manager (AIFM) remain responsible for the activities delegated to third parties and the need to oversee their activities and performance. With a view to simplify and facilitate initial and ongoing due diligence reviews, an ALFI working group under the aegis of the ALFI Fund Governance Forum was created to consider whether the different approaches taken to due diligence on delegates by the boards of Luxembourg funds, management companies, and AIFMs could be more consistent.
The ALFI working group has now finalised a Framework for Due Diligence Information Packs for service providers acting as central administrators and/or depositary/custodian.
This framework seeks to provide a table of contents upon which service providers (delegates) to which a fund Board, Management Company or AIFM has delegated activities and services can base their preparation of documentation required to support the initial and ongoing due diligence reviews of a fund and/ or its Management Company under Luxembourg regulations. The document should not be considered as an exhaustive list of areas for delegates to cover, nor a prescriptive guide on the approach to a due diligence process. It is intended to facilitate an effective due diligence process for the delegates as well as those undertaking due diligence.
Download the document here.
On 27 March 2015, the Luxembourg draft law on FATCA was submitted to Parliament. The law will ratify the execution of the Intergovernmental Agreement (IGA) signed between Luxembourg and the United States of America on 28 March 2014 as well as the related Appendices and Memorandum of Understanding. It is expected that the law will be passed in the coming days. In this context, ALFI's implementation working groups for FATCA prepared a Q&A document to deal specifically with reporting and withholding issues in the context of FATCA.
It should be read in conjunction with a first Q&A prepared by ALFI on the implementation of FATCA in the context of Luxembourg domiciled investment funds, which you may download here. The Q&A does not aim to address all existing cases. Click here to access the Q&A.
The working groups comprise representatives of asset managers, management companies, securities service providers, audit firms, law firms, the Luxembourg Pension Funds Association and document and information management firms. ALFI hopes that this document will serve its members as a reference document when implementing FATCA. It represents the view of a group of market participants and is not binding for the Luxembourg Tax Authorities or the national regulator. The Q&A has been submitted to and discussed with them, but it has not been validated by anyone. The document does not diminish the responsibility of management companies or investment companies to comply with national law or regulation. It must not be relied upon as advice and is provided without any warranty of any kind and neither ALFI nor its members who contributed to this document accept any liability whatsoever for any action taken in reliance upon it. The answers are not necessarily definitive and they might not be suitable for every circumstance.
The document may be amended without prior notice to incorporate new material and to amend previously published material where the working group considers it appropriate. ALFI will publish amended copies of this document to its members, showing marked-up changes from the immediately preceding copy. ALFI's members are welcome to submit a question to the working group, who will review it and consider whether to respond to it in a future copy of this document. Please send your questions to firstname.lastname@example.org. ALFI will acknowledge receipt of each question but we regret that we may be unable to reply individually to each one.
The working groups have deliberately decided to issue this Q&A document ahead of the publication of the Luxembourg FATCA Law. Users of this Q&A document are advised to supplement this document with the legal texts (law, decree and/or circulars) once published. This document will be updated as deemed appropriate and if the need arises.
The Luxembourg Tax Authorities have confirmed that the reporting deadline is exceptionally postponed to 31 July 2015 instead of 30 June 2015 for the first reporting year 2014. Reporting financial institutions are also reminded that as per article 3 paragraph 4 of the draft law, they must inform any individual on behalf of whom they will report.
On 19 June 2015 ALFI responded to the EBA consultation paper on draft guidelines on limits on exposures to shadow banking entities. The EBA proposes, in the absence of a definition of “shadow banking entities”, to include alternative investment funds and money market funds under the definition of shadow banking entities which carry out banking activites outside a regulated framework. To read the full response please click here.
ALFI annual report 2014-2015 presents facts and figures on the development of the Luxembourg investment fund industry and the activities of our association. Link to flip book version. Older editions can be found here.
The Association of the Luxembourg Fund Industry (ALFI) today unveiled its “Ambition” for the next four years, led by new chairman, Denise Voss.
Denise Voss explained: “We have identified a number of factors that will impact the fund industry over the next few years related to consumer trends, demographics and technology, as well as shifts in the asset management industry itself.”
“It’s important that, as an industry, we anticipate and address these shifts if we are to continue to serve the interests of investors and the economy. To underpin this, we are committed to strengthening Luxembourg’s position as the international fund centre of reference, recognized as open, reliable and innovative by investors, policymakers and industry alike.”
In order to achieve its ambition, ALFI has set itself five key objectives for the next four years:
- Promote practices that align the interests of investors and industry by helping asset managers ensure that their practices, products and services match their clients’ needs in an era of global, digital distribution;
- Articulate the essential role of investment funds for the global economy by demonstrating how funds help resolve long-term issues of funding pensions, financing innovation and infrastructure, and contribute to growth;
- Connect investors with worldwide market opportunities by continuing to facilitate cross-border fund distribution for the benefit of the global community of investors who wish to participate in economic growth practically anywhere in the world;
- Ensure Luxembourg remains the fund centre of choice for asset managers by offering asset managers the best access to global distribution, deep and competitive talent and servicing infrastructure, outstanding corporate governance, an efficient and effective approval and oversight process, and a clear regulatory and taxation framework;
- Stimulate innovation, research, education and talent development by encouraging academic research related to the investment fund sector, supporting the development of new retail investor technologies and applications with a particular focus on the next generation of investors, as well as expanding professional training programs to broaden and deepen the talent pool for the global fund industry.
Ms Voss concludes: “Luxembourg has played a key role in helping asset managers work through the implementation of extensive regulation after the crisis and has created effective solutions for asset managers, enabling them to distribute their funds globally. We must now also address the shifts in demographics and technology if the industry is to continue to play its role of serving the interests of investors and of the economy.”
The Association of the Luxembourg Fund Industry (ALFI) today announced the appointment of Denise Voss as chairman of ALFI. Ms Voss takes up the position, which will initially run for two years, with immediate effect.
“I am very excited about this appointment,” said Ms Voss. “The asset management industry in Europe has gone through dramatic change over the past few years, with extensive regulation that has been put in place following the crisis, and ALFI has played a key role in working through the implementation of this regulation.”
”Going forward, we face different challenges, for instance, from the greying of the population and more and more individuals being responsible for funding their own retirement, to the growth of digital technology, which means that buying habits are changing dramatically. My role is to inspire the industry to focus on these issues and to ensure that the Luxembourg Fund Industry continues to play a key role in driving the development of the industry worldwide, encouraging economic growth and providing long-term financial security for individuals.”
Denise Voss has played a key role in ALFI for many years. She has been Vice Chairman for International Affairs of ALFI since 2011 and has been a member of the ALFI board of directors since 2007. She is also Chairman of the European Fund and Asset Management Association (EFAMA) Investor Education working group.
Denise is Conducting Officer of Franklin Templeton Investments and has worked in the financial industry in Luxembourg since 1990. She joined Franklin Templeton Investments in 1995 where she is Conducting Officer of Franklin Templeton International Services S.à r.l., a Luxembourg-based management company, managing both UCITS and AIFs, in and outside of the EU.
Prior to joining Franklin Templeton Investments, Denise worked in the audit division of Coopers & Lybrand in Boston, USA and Luxembourg for over 9 years. Denise holds a Massachusetts C.P.A. license and obtained an undergraduate degree from Tufts University, as well as a masters degree in accountancy from Bentley College.
The new Board of Directors is as follow:
Georges Bock, KPMG Luxembourg Société cooperative
Freddy Brausch, Linklaters LLP
Stéphane Brunet, BNP Paribas Investment Partners Luxembourg S.A.
Martin F. Dobbins, State Street Bank Luxembourg S.A.
Jacques Elvinger, Elvinger, Hoss & Prussen
Michael Ferguson, Ernst & Young S.A.
Noel Fessey, Schroder Investment Management (Luxembourg) S.A.
Rafik Fischer, KBL European Private Bankers S.A.
Bettina Graeber-Hendry, Pictet & Cie (Europe) S.A.
Jonathan P. Griffin, JPMorgan Asset Management (Europe) S.à r.l.
Ewald Hamlescher, GAM (Luxembourg) S.A.
Rudolf Kessel, Union Investment Luxembourg S.A.
Lou Kiesch, Deloitte Luxembourg
Rudolf Kömen, Credit Suisse Fund Management S.A.
Claude Kremer, Arendt & Medernach S.A.
Eugen Lehnertz, Deka International S.A.
Steven Libby, PricewaterhouseCoopers, Société Coopérative
Markus Nilles, Allianz Global Investors GmbH, Zweigniederlassung Luxembourg
Geoff Radcliffe, BlackRock (Luxembourg) S.A.
Gilbert Schintgen, UBS Fund Management (Luxembourg) S.A.
Thomas Seale, European Fund Administration S.A.
Denise Voss, Franklin Templeton Investments
Marc Wathelet, FIL Investment Management (Luxembourg) S.A.
Julien Zimmer, DZ Privatbank S.A.
On 4 June 2015, ALFI responded to the EBA consultation on draft guidelines on sound remuneration policies under Article 74(3) and 75(2) of Directive 2013/36/EU and disclosures under Article 450 of Regulation (EU) No 575/2013.
Issues adressed in the paper relate, among others, to the definition of staff, remuneration policies and group context, proportionality, and equivalence of remuneration rules for CRD IV, AIFMD and UCITS. The full response can be read here.
On 29 May 2015, ALFI responded to the second FSB and IOSCO consultation on “Assessment methodologies for identifying non-bank non-insurer global systemically important financial institutions (NBNI G-SIFIs)”.
ALFI is of the view that highly regulated funds such as UCITS or regulated Alternative Investment Funds that comply with detailed diversification rules and are not highly leveraged are not systemically important and do not cause systemic risk. Moreover, ALFI believes asset managers are not a source of systemic risk. Managers are not the counterparty to trades they conduct on behalf of their clients (agency model). It is worth noting that many funds and asset managers exit the business every year, without giving rise to systemic risk.
As further explained in the response, ALFI considers it more appropriate to focus on market activities, such as the use of high leverage and derivatives that may cause systemic risk to the financial system.