Circular IML 91/75 (as amended by Circulars CSSF 05/177, 18/697, 21/790, 22/811 and 25/901) (Updated)
Executive Summary
Circular IML 91/75, as amended up to CSSF Circular 25/901, consolidates and modernizes the supervisory framework for Luxembourg Part II UCIs, SIFs, and SICARs, refining rules on diversification, borrowing, risk-spreading, and disclosures while tailoring requirements to investor profiles. It matters because it streamlines fragmented regulations, enhances fund competitiveness, and formalizes CSSF expectations without mandating immediate changes for pre-existing funds, reducing compliance burdens while promoting transparency and flexibility. This update aligns administrative practices with market realities, repealing outdated circulars to eliminate ambiguity. #
What Changed
- Consolidation and Repeals: Repeals CSSF Circulars 02/80, 07/309, 06/241, and Chapters G and I of IML 91/75; renders CSSF 08/356 and Chapter H of IML 91/75 inapplicable to Part II UCIs. - Flexible Diversification Rules: Introduces investor-category-based thresholds (e.g., stricter for retail, looser for sophisticated investors); allows CSSF derogations for SIFs/Part II UCIs with justification; applies look-through for intermediary vehicles; harmonizes ramp-up (up to 12 months for liquid strategies, 4 years for private equity) and wind-down periods. - Borrowing Limits: New limits for SIFs/Part II UCIs (e.g., 70% of net assets, excluding temporary borrowings tied to commitments); tailored by investor type. - Enhanced Disclosures: Offering documents must detail investment policies, risks (es
What You Need To Do
- Review and update offering documents/prospectuses for enhanced transparency on risks, limits, borrowing, liquidity tools (e
- Align fund documentation/terminology with CSSF Compilation of key concepts for consistency in filings and communications
- Disclose ramp-up/wind-down periods, potential derogations, and life extensions clearly; seek CSSF approval for exemptions where justified
- Assess portfolio compliance for new funds/compartments; leverage flexibility for sophisticated investors but maintain robust governance
- No immediate changes required for pre-19 Dec 2025 funds, but proactive alignment recommended to avoid future issues
Compliance Impact
Urgency: Medium – Not critical as existing funds are grandfathered with no retroactive changes required, but high relevance for new launches or material updates post-19 Dec 2025. It matters for operational efficiency (streamlined rules reduce fragmentation) and investor protection (tailored risks/disclosures), potentially lowering long-term costs while mitigating supervisory scrutiny; failure to u
Who is Affected
Summary
Revision and remodelling of the rules to which Luxembourg undertakings governed by the Law of 30 March 1988 on undertakings for collective investment (“UCI”) are subject