{"id":221,"date":"2018-09-19T11:41:22","date_gmt":"2018-09-19T09:41:22","guid":{"rendered":"https:\/\/jinfa.tax\/en\/?p=221"},"modified":"2018-10-23T21:59:24","modified_gmt":"2018-10-23T19:59:24","slug":"new-cssf-circular-18-698-on-the-substantive-requirements-for-fund-companies-in-luxembourg-a-leap-forward-in-governance","status":"publish","type":"post","link":"https:\/\/jinfa.tax\/en\/2018\/09\/19\/new-cssf-circular-18-698-on-the-substantive-requirements-for-fund-companies-in-luxembourg-a-leap-forward-in-governance\/","title":{"rendered":"New CSSF Circular 18\/698 on the substantive requirements for fund companies in Luxembourg-a leap forward in governance"},"content":{"rendered":"<p>On 23 August, the CSSF published the long waited, new <a href=\"http:\/\/www.cssf.lu\/fileadmin\/files\/Lois_reglements\/Circulaires\/Hors_blanchiment_terrorisme\/cssf18_698.pdf\" target=\"_blank\" rel=\"noopener\">CSSF Circular 18\/698<\/a> (hereafter \u201ccircular\u201d) on the \u201cauthorization and organization of Luxembourgish investment management companies; Specific provisions on the fight against money laundering and terrorist financing applicable to investment fund managers and entities carrying out the function of registrar agent.\u201d<\/p>\n<p>The new <a href=\"http:\/\/www.cssf.lu\/fileadmin\/files\/Lois_reglements\/Circulaires\/Hors_blanchiment_terrorisme\/cssf18_698.pdf\" target=\"_blank\" rel=\"noopener\">CSSF circular 18\/698<\/a> has been expanded; it now applies\u00a0<b>to both UCITS management companies and alternative investment fund managers, as well as management companies subject to chapters 16 and 17<\/b>\u00a0of the Law of 17 December 2010 relating to undertakings for collective investment. It sets out the fundamental governance and organizational structures that are expected in terms of substance from Luxembourg investment management companies (hereafter \u201cGFI\u201d as defined by the circular).<\/p>\n<p>The circular sets out the existing practices that were applied by the CSSF as well as some specific new requirements in relation to the governance; central administration and internal controls; the fight against money laundering and terrorist financing; key functions such as delegated activities, marketing, internal administration, and procedures; and valuation.<\/p>\n<p>The circular also includes the requirements in respect to the compliance and internal control functions of the GFI in one single document, which were previously covered by CSSF Circular 04\/155 and IML Circular 98\/143. Therefore, CSSF Circular 04\/155 and IML Circular 98\/143 are no longer applicable to GFI.The most salient chapters of the circular are:<\/p>\n<ul>\n<li>Comprehensive list of definitions, such as \u201cdelegate\u201d and \u201ckey functions\u201d<\/li>\n<li>Introduction of a \u201cfit and proper\u201d dashboard for board members and conducting officers<\/li>\n<li>Defined threshold on the time spent and number of mandates for board members (maximum 1,920 hours per annum and 20 mandates)<\/li>\n<li>Focus on delegation and oversight aspects applicable to all delegates of GFI<\/li>\n<li>Alignment of the delays within which the annual reports\/recurring information have to be transmitted to the CSSF \u2013 five months after the business year-end of the GFI<\/li>\n<li>Alignment of the risk management requirements for AIFs and UCITS<\/li>\n<li>Definition of the three-lines-of defense model to be applied by GFI<\/li>\n<li>Different scenarios and rules in respect of AML\/CFT<\/li>\n<li>New annual reporting requirements in the area of AML\/CFT to be transmitted to the CSSF<\/li>\n<li>Own funds requirements for GFI with a discretionary portfolio management license and offering investment management services<\/li>\n<li>Specific sections on the application of the European Market Infrastructure Regulation (EMIR) and Money Market Fund Regulation (MMFR)<\/li>\n<li>Exchange of information between the GFI and the depositary<\/li>\n<\/ul>\n<p>It is clear that this new circular is an evolution, hence it is expected that substantial efforts may have to be undertaken until the requirements of the new CSSF circular can be considered as fully implemented across the entire industry.<\/p>\n<p>The\u00a0<b><a href=\"http:\/\/www.cssf.lu\/fileadmin\/files\/Lois_reglements\/Circulaires\/Hors_blanchiment_terrorisme\/cssf18_698.pdf\" target=\"_blank\" rel=\"noopener\">CSSF Circular 18\/698<\/a> applies with immediate effect and repeals CSSF Circular 12\/546<\/b>, as amended. Assessing and implementing changes where required to your governance and business strategy has become a de facto priority. Find here the link for the circulaire in<a href=\"http:\/\/www.cssf.lu\/fileadmin\/files\/Lois_reglements\/Circulaires\/Hors_blanchiment_terrorisme\/cssf18_698.pdf\" target=\"_blank\" rel=\"noopener\">\u00a0French.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On 23 August, the CSSF published the long waited, new CSSF Circular 18\/698 (hereafter \u201ccircular\u201d) on the \u201cauthorization and organization of Luxembourgish investment management companies; Specific provisions on the fight against money laundering and terrorist financing applicable to investment fund managers and entities carrying out&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-221","post","type-post","status-publish","format-standard","hentry","category-allgemein"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New CSSF Circular 18\/698 on the substantive requirements for fund companies in Luxembourg-a leap forward in governance - jinfa tax S.\u00e0 r.l.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/jinfa.tax\/en\/2018\/09\/19\/new-cssf-circular-18-698-on-the-substantive-requirements-for-fund-companies-in-luxembourg-a-leap-forward-in-governance\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New CSSF Circular 18\/698 on the substantive requirements for fund companies in Luxembourg-a leap forward in governance - jinfa tax S.\u00e0 r.l.\" \/>\n<meta property=\"og:description\" content=\"On 23 August, the CSSF published the long waited, new CSSF Circular 18\/698 (hereafter \u201ccircular\u201d) on the \u201cauthorization and organization of Luxembourgish investment management companies; 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