Investment Fund Managers to Report Non-Luxembourg Assets, Or Risk Regulatory Compliance!
The CSSF has just tightened its grip on Luxembourg’s fund industry with the introduction of Circular 25/894. This new directive, which repeals and replaces the older Circular 15/612, forces a fundamental change in how Luxembourg-based Investment Fund Managers (IFMs)—including ManCos and AIFMs—must report on the funds they manage that aren’t directly authorized by the CSSF.
The message is clear: even if a fund is domiciled abroad or is an unregulated AIF, the CSSF wants a comprehensive, real-time overview of it. This move isn’t just about local oversight; it’s a direct response to Europe-wide demands for greater transparency and control over the entire financial ecosystem.
A Deeper Dive: What Luxembourg IFMs Must Now Report
The new circular expands the scope of what must be reported and imposes strict new deadlines. It’s no longer enough to just mention a fund’s existence. The CSSF now requires a detailed look at the fund’s entire structure and operations.
Here’s what Luxembourg IFMs are now on the hook for:
- Expanded Scope: The circular applies to all investment funds not authorized by the CSSF. This includes UCITS and AIFs established in other EU/EEA member states, as well as unregulated or third-country AIFs.
- eDesk-First Approach: All required information must be submitted through the CSSF’s eDesk platform using dedicated forms. This digital-first approach ensures a standardized and efficient flow of data to the regulator.
- Mandatory Service Provider Details: The circular now specifically requires IFMs to report on the fund’s key service providers. This includes not only administrators and depositaries but also delegated portfolio managers and sub-delegates. This gives the CSSF a granular view of the fund’s entire operational and delegation structure.
- Timely Reporting: Deadlines are tight. For most IFMs, a notification must be made before they begin managing a new, non-authorised fund. For registered AIFMs, the deadline is within 10 working days. Crucially, any substantial changes to the fund’s information or the termination of a management mandate must also be reported without delay.
THE REAL REASON: EU OBLIGATIONS AND RISK MANAGEMENT
This circular is the CSSF’s way of fulfilling its supervisory duties and meeting its obligations to the European Securities and Markets Authority (ESMA). By having a complete and up-to-date picture of all funds managed by Luxembourg IFMs, regardless of where they are domiciled, the CSSF can more effectively monitor for systemic risks and ensure that all players are adhering to European standards.
For IFMs, this is a clear signal to review their portfolios and ensure they’re in full compliance. The consequences of failing to report—including fines and reputational damage—are a risk no firm can afford to take. The era of managing “off-the-books” funds is over; the CSSF is now watching everything.
