FAQ concerning Master/Feeder Structures (Updated)
Executive Summary
This CSSF FAQ (Version 2, July 2013, with updates through 24 June 2013 and 11 July 2013) provides guidance on master-feeder structures for UCITS funds under the Luxembourg Law of 12 July 2010 (the "2010 Law"), addressing financial reporting, performance disclosure, and operational requirements. It matters for Luxembourg-domiciled UCITS managers and depositaries as it clarifies compliance with UCITS Directive rules on aggregation of charges, audit irregularities, and past performance in cross-border master-feeder setups, reducing ambiguity in documentation and investor communications. #
What Changed
- Financial reporting for aggregate charges (Art 82(2) 2010 Law): When master and feeder UCITS have different year-ends, feeder must present master charges for the same period if possible; otherwise, use master's last audited period with strict conditions (e.g., clear audit report disclosure, no undue costs), and agreements must mandate information provision. - Disclosure of irregularities (CSSF Regulation 10-05 Art 27(e)): Present in notes to financial statements or "other information" section of annual report. - Past performance rules (Art 159(3)c) 2010 Law and Commission Regulation (EU) 583/2010): Feeders converting to new masters cannot refer to pre-conversion past performance; masters converting from existing UCITS can retain their record with material change disclosure; new feeders c
What You Need To Do
- Review and amend master-feeder agreements (per Art 79(1) 2010 Law) to require masters provide charge/fee data to feeders
- Ensure financial statements/annual reports disclose irregularities in specified sections and aggregate charges with audit report caveats if periods misalign
- Update KIIDs and marketing materials for past performance compliance, disclosing conversions/material changes per Regulation 583/2010 Articles 17, 19, 35
- Implement processes for ad hoc financial statements when accounting years differ, allocating audit/preparation fees appropriately
- Monitor CSSF website regularly for FAQ updates
Compliance Impact
Urgency: low—This 2013 guidance (Version 2) is outdated relative to 2026, with no new enforcement actions noted, but remains relevant for legacy UCITS master-feeder structures under the 2010 Law. It matters for audit/financial close processes and investor disclosures to avoid CSSF scrutiny, particularly in cross-border setups where ESMA UCITS rules apply; non-compliance risks reporting errors or i
Who is Affected
Summary
Version 3