LUXEMBOURG: FAQs concerning the Luxembourg Law Relating to Undertakings for Collective Investment

Friday August 7 2020

On 07^th August 2020, the Commission de Surveillance du Secteur Financier (CSSF) published an updated FAQ concerning the Luxembourg Law of 17 December 2010 relating to undertakings for collective investment.

Question:  Do Loans constitute eligible investments for UCITS?

Answer: No. Loans cannot be considered as assets as referred to in Article 41 (1) and (2) (a) of the Law of 2010 as they do not qualify as:

• money market instruments within the meaning of article 1 (23) of the Law of 2010 and Articles 3 and 4 of Regulation 2008, further clarified by the CESR guidelines;
• transferable securities within the meaning of Article 1 (34) of the Law of 2010 and Article 2 of the Regulation 2008, further clarified by the CESR guidelines.

UCITS that would be invested in Loans have to disinvest from those positions by 31 December 2020, taking into account the best interests of investors. In addition, the prospectuses of those UCITS, offering the possibility to invest in Loans, have to be updated, by 31 March 2021 at the latest, in order to no longer provide for the possibility for such investments.

Click on the link for further information.