Luxembourg improves its SIFs in readiness for AIFMD

Advisers and managers have some legislative developments to catch up on following Luxembourg’s approval of a draft bill of law which will modify the law on Specialised Investment Funds (SIF), the investment vehicle of choice for non-UCITS in Luxembourg.

This announcement dovetails with the publication of the Alternative Investment Fund Managers Directive (AIFMD) setting out the regulation of the activities of entities engaged in the management and administration of funds that are not UCITS funds. It also lays down rules for the marketing of those funds to professional investors within the EU.

This latest initiative of Luxembourg legislators seeks to adapt the SIF legislation to certain aspects of AIFMD, notably in terms of delegation and risk management as well as integrate certain improvements (such as cross-compartment investments) that were previously introduced for UCITS. These changes enable the fine-tuning of the level of regulation applied to SIFs in Luxembourg which, in turn, will further improve the overall quality of these funds which have proven their popularity with more than 1,200 fund launches since 2007.

“Combined with the CSSF’s (Commission de Surveillance du Secteur Financier) practice to provide feedback within 10 working days on applications to launch, the SIF is now perfectly designed to become the preferred vehicle for asset managers wishing to benefit from the passport that the AIFMD will grant to alternative fund managers as of 2013,” commented Marc Saluzzi, Chairman of the Association of the Luxembourg Fund Industry (ALFI).

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