Luxembourg Brexit Laws
On 8 April 2019, the Luxembourg Parliament adopted the first bills in a series of laws relating to Brexit, detailing the measures to be taken in case of a No Deal exit of the United Kingdom from the European Union in relation to the Luxembourg financial services industry.
Bill of law n°7401
The first bill, n°7401, sees a grandfathering period of 21 months, granted by the Luxembourg regulators, CSSF and CAA, for services provided to Luxembourg funds, including investment funds, AIFMS and management companies, with the aim of guaranteeing investor protection. Services will be limited to those currently in place or closely connected.
The law will be effective as from the date of withdrawal from the European Union if no deal is agreed.
Bill of law n°7426
In addition, the bill of law n°7426 addressing specific Brexit-related matters concerning Luxembourg-regulated collective investments, including specialised investment funds (SIFs), was adopted. This bill allows for a grace period of 12 months to mitigate breaches of investment restrictions caused by Brexit. Fund managers would benefit from this period to rearrange their portfolio and dispose their UK assets, as required. Contrary to bill of law n°7401, this bill applies for both a deal and a no deal Brexit.
Who is concerned?
The laws concern UK regulated fund managers authorised under Directive 2009/65/EC and/or Directive 2011/61/EU and other UK financial and investment institutions as well as UK UCITS marketed in Luxembourg under the UCITS Directive.
CSSF notification deadline
The CSSF may permit concerned managers and institutions to continue activities during the transitional period of 12 months.
The deadline to submit a CSSF notification to continue activities is fast approaching – 15 September 2019. The notification is to be submitted via the dedicated eDesk portal.
The CSSF will assess each application on a case-by-case basis.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.