Fiddich Review Centre
Alternative Investment

CSSF Press Release: Eligible Entities In Luxembourg To Hold Alternative Investment Funds Cash Accounts – Fund Management/ REITs


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On 18 October 2022, the Commission de Surveillance du Secteur
Financier (the “CSSF“) has issued a
press release regarding eligible entities for the opening of cash
accounts in relation to Luxembourg alternative investment funds
(“Press Release“).

The CSSF has reminded AIFs managed by authorised AIFMs that:

  • In accordance with article 19(7) of the law of 12 July 2013, as
    amended (the “AIFM Law“), all the cash
    of an alternative investment fund
    (“AIF“) has to be booked in cash
    accounts opened with: central banks, EU authorised credit
    institutions and third country authorised banks, as set out under
    article 18(1) (a), (b) and (c ) of Directive 2006/73/EC, or another entity of the
    same nature, in the relevant market where cash accounts are
    required provided that such entity is subject to effective
    prudential regulation and supervision which have the same effect as
    European Union law and are effectively enforced and in accordance
    with the principles set out in Article 16 of Directive 2006/73/EC
    (each an “Eligible Entity“);

  • The depositary must ensure that the AIF’s cash flows are
    properly monitored, and payments made by or on behalf of investors
    upon the subscription of units or shares of an AIF have been
    received and all cash of the AIF has been booked in cash accounts
    opened in the name of the AIF or in the name of the AIFM acting on
    behalf of the AIF or in the name of the depositary acting on behalf
    of the AIF with an Eligible Entity;

  • A professional depositary of assets, other than financial
    instruments under article 26-1 of the law of 5 April 1993 on the
    financial sector, as amended
    (“PDAOFI“),cannot directly hold the cash
    of an AIF; and

  • Any new AIF must ensure that cash accounts will be held by an
    Eligible Entity.

In light of the above, AIFs that have appointed an authorised
AIFM and have their cash account with an electronic money
institution or a payment institution, shall reassess their set up,
in order to ensure that, as soon as possible and by no later than
30 June 2023:

  • a depositary within the meaning of article 19(3)(i) of the AIFM
    Law is appointed; and

  • cash of the AIF is deposited with an Eligible Entity.

AIFs that have appointed an authorised AIFM shall not set up new
sub-funds whose cash accounts are held by an electronic money
institution or a payment institution.

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.

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