SIF - Law of the 13th of February 2007
- Amended law of 20th December 2002 on the undertakings for collective investment
- Amended law of 12th February 1979 on the value added tax
1. General provisions and scopes
2. Collective Investment funds
3. Investment companies with variable capital
4. Specialised investment funds which have not been constituted as collective investment funds or SICAVs
5. Authorisation and supervision
6. Dissolution et liquidation
7. Establishment of an issuing document and of an annual report
8. Transmission of other information to the CSSF
9. Protection of name
10. Criminal law provisions
11. Fiscal provisions
12. Special provisions in relation to the legal form
13. Amending provisions
14. Transitional and repealing provisions
15. Final provisions
Chapter 1
General provisions and scope
Art. 1.
1. For the application of the present law, will be considered as specialised investment funds all undertakings for collective investment located in Luxembourg:
- the sole object of which is the collective investment of their funds in assets with the aim to diversify the investment risks and to have their investors benefit from the results of the management of their assets, and
- that reserves its securities to one or more informed investors, and
- the constitutive or issuing documents of which provide that they are submitted to the provisions of the present law.
2. Specialised investment funds may take the legal forms provided for in Chapters 2, 3 and 4 of the present law.
Art.2.
1. Is an informed investor within the meaning of the present law the institutional investor, the professional investor as well as any other investor who fulfils the following conditions:
a) he has declared in writing his adhesion to the informed investor status and
b) (i) he has invested a minimum of EUR 125,000 in the specialised investment fund, or
(ii) he benefits from the appreciation, from a credit institution within the meaning of directive 2006/48/EC, an investment company within the meaning of directive 2004/39/EC or a management company within the meaning of directive 2001/107/EC certifying its expertise, experience and its knowledge to appreciate in an adequate way the investment made in the specialised investment fund.
2. The conditions of the present article do not apply to the directors and other persons taking part in the management of specialised investment funds.
Art.3.
The specialised investment funds submitted to the present law are deemed to be situated in Luxembourg if the registered office of the management company of the collective investment fund [fonds commun de placement] or the registered office of the investment company is situated in Luxembourg. The central administration must be situated in Luxembourg.
Chapter 2
Collective investment funds
Art.4.
There shall be regarded as a collective investment fund for the application of this law any undivided collection of assets made up and managed according to the principle of risk-spreading on behalf of joint owners who are liable only up to the amount contributed by them and whose rights are represented by units reserved to one or more informed investors.
Art.5.
The collective investment fund shall not be liable for the obligations of the management company or of the unit-holders; it shall be answerable only for the obligations and expenses expressly imposed upon it by its management regulations.
Art.6.
Collective investment funds shall be managed by a management company submitted to Luxembourg law, which shall comply with the conditions listed in Part IV, Chapter 13 or 14, of the law of 20 December 2002 relating to undertakings for collective investment.
Art.7.
1. The management company shall issue registered certificates or bearer securities, representing one or more portions of the collective investment fund which it manages, or, in accordance with the conditions laid down in the management regulations, written confirmations of entry in the register of units or fractions of units without limitation as to the splitting-up of units.
Rights attached to fractions of securities are exercised in proportion to the fraction of a security held except for possible voting rights which can only be exercised for whole securities. The (registered) certificates and (bearer) securities shall be signed by the management company and by the depositary referred to in Article 16.
Such signatures may be reproduced mechanically.
2. Ownership of securities shall be determined and transfer thereof shall be effected in accordance with the rules laid down in Articles 40 and 42 of the Law of 10th August 1915 concerning commercial companies, as amended.
Art.8.
The issue and, the case being, the redemption of securities are effected in accordance with the modalities and forms provided for in the management regulations.
Art.9.
Unless otherwise provided for in the management regulations of the fund, the valuation of the assets of the collective investment fund is based on the fair value. This value must be determined in accordance with the provisions in the management regulations.
Art.10.
Neither the unit-holder nor their creditors may require the distribution or the dissolution of the collective investment fund.
Art.11.
1. The Commission for the Supervision of the Financial Sector ("CSSF”) may, in the interest of the holders of securities or of the public, require the suspension of the repurchase of securities, in particular where the provisions of laws, regulations or agreements concerning the activity and operation of the collective investment fund are not observed.
2. The issue and repurchase of securities shall be prohibited:
a) during any period where there is no management company or depositary,
b) where the management company or the depositary is put into liquidation or declared bankrupt or seeks a composition with creditors, a suspension of payment or a court controlled management or is the subject of a similar measure.
Art.12.
1. The management company shall draw up the management regulations for the collective investment fund.
Such regulations must be lodged with the company register and its publication in the Memorial is made by means of a reference to the filing of this document with the company register in accordance with the provisions of the Law of 10th August 1915 concerning commercial companies, as amended. The provisions of such regulations shall be deemed accepted by the unit-holders by the mere fact of the acquisition of such units.
2. The management regulations of the collective investment fund shall at least contain the following provisions:
(a) the name and duration of the collective investment fund, the name of the management company and of the depositary,
(b) the investment policy according to its proposed specific objectives and the criteria therefore,
(c) the distribution policy within the scope of Article 15,
(d) the remuneration and expenditure which the management company is empowered to charge to the fund and the methods of calculation of such remuneration,
(e) the provisions as to publications,
(f) the date of the closing of the accounts of the collective investment fund,
(g) the cases where, without prejudice to legal grounds, the collective investment fund may be dissolved,
(h) the procedures for amendment of the management regulations,
(i) the procedure for the issue and, the case being, repurchase of units.
Art.13.
1. The management company shall manage the collective investment fund in accordance with the management regulations and in the exclusive interest of the unit-holders.
2. It shall act in its own name, but shall indicate that it is acting for the account of the collective investment fund.
3. It shall exercise all the rights attached to the securities comprised in the portfolio of the collective investment fund.
Art.14.
The management company must fulfil its obligations with the diligence of a salaried agent; it shall be answerable to the holders of securities for any loss resulting from the non-fulfilment or improper fulfilment of its obligations.
Art.15.
Unless otherwise provided for in the management regulations, the net assets of the collective investment fund may be distributed subject to the limits set out in Article 21 of the present law.
Art.16.
1. The custody of the assets of the collective investment fund must be entrusted to a depositary.
2. The depositary must either have its registered office in Luxembourg or be established in Luxembourg if its registered office is in another Member State of the European Union.
3. The custodian must be a credit institution within the meaning of the law of 5 April 1993 relating to the financial sector, as amended.
4. The depositary's liability shall not be affected by the fact that it has entrusted to a third party all or some of the assets in its custody.
5. The depositary accomplishes all operations concerning the day-to-day administration of the assets of the collective investment funds.
Art.17.
1. The depositary shall, in accordance with Luxembourg law, be liable to the management company and the unit-holders for any losses suffered by them as a result of its wrongful failure to perform its obligations or its wrongful improper performance thereof.
2. The liability to unit-holders shall be invoked indirectly through the management company. Should the management company fail to act despite a written notice to that effect from a unit-holder within a period of three months following receipt of such a notice, such unit-holder may directly invoke the liability of the depositary.
Art.18.
In the context of their respective roles, the management company and the depositary must act independently and solely in the interest of the unit-holders.
Art.19.
The duties of the management company or of the depositary in respect of the collective investment fund shall cease:
a) in the case of withdrawal of the management company, provided that it is replaced by another management company authorised in accordance with Article 6 of the present law;
b) in the case of voluntary withdrawal of the depositary or of its removal by the management company; until it is replaced, which must happen within two months, the depositary shall take all necessary steps to ensure the good preservation of the interests of the holders of securities;
c) where the management company or the depositary has been declared bankrupt, has entered into a composition with creditors, has obtained a suspension of payment, has been put under court controlled management, or has been the subject of a similar measure or has been put into liquidation;
d) where the CSSF withdraws its authorisation of the management company or the depositary;
e) in all other cases provided for in the management regulations.
Art.20.
1. Liquidation of the collective investment fund shall take place:
a) upon the expiry of any period as may be fixed by the management regulations;
b) in the event of cessation of the duties of the management company or of the depositary in accordance with items b), c), d) and e) of Article 19, if they have not been replaced within two months, without prejudice of the specific case referred to under item) below;
c) in the event of bankruptcy of the management company;
d) if the net assets of the collective investment fund have fallen for more than 6 months below one fourth of the legal minimum provided for in Article 21 hereafter;
e) in all other cases provided for in the management regulations.
2. Notice of the event giving rise to liquidation shall be brought without delay by the management company or the depositary to the attention of the unit-holders and to eventual creditors of the collective investment fund. If they fail to do so, such notice will be published by the CSSF at the expense of the collective investment fund. The notice shall be published in the Mémorial and in at least two newspapers with adequate circulation one of which at least must be a Luxembourg newspaper.
3. As soon as the event giving rise to liquidation of the collective investment fund occurs, the issue of units shall be prohibited, on pain of nullity. The repurchase of units shall continue to be permitted insofar as the equal treatment of unit-holders may be assured.
Art.21.
The net assets of a collective investment fund may not be less than one million two hundred and fifty thousand euros (EUR 1.250.000).
This minimum must be reached within a period of twelve months following the authorisation of the collective investment fund.
A grand-ducal regulation may increase such minimum amount to a higher figure subject to a maximum of two million five hundred thousand euros (EUR 2.500.000).
Art.22.
The management company must without delay inform the CSSF if the net assets of the collective investment fund have fallen below two thirds of the legal minimum. In a case where the net assets of the collective investment fund have fallen below two thirds of the legal minimum, the CSSF may, having regard to the circumstances, compel the management company to put the collective investment fund into liquidation.
The order addressed to the management company by the CSSF to put a collective investment fund into liquidation shall be brought without delay by the management company or the depositary to the attention of the unit-holders as well as to eventual creditors of the collective investment fund. If they fail to do so, such notice shall be published by the CSSF at the expense of the collective investment fund. The notice shall be published in the Memorial and in at least two newspapers with adequate circulation, one of which at least must be a Luxembourg newspaper.
Art.23.
Neither the management company nor the depositary acting for the account of the collective investment fund may grant credits to unit-holders of the collective investment fund.
Art.24.
The indication “fonds commun de placement” [collective investment fund] or “FCP” is completed, for the funds falling within the application of the present law, by that of “fonds d'investissement specialisé” [specialised investment fund] or “FIS” [SIF].
Chapter 3
Investment companies with variable capital
Art.25.
For the purposes of the present law, investment companies with variable capital (“SICAVs”) shall be taken to mean companies,
- having adopted the form of a public limited company, a partnership limited by shares, a private limited company or a co-operative company organised under the form of a public limited company,
- whose exclusive object is to invest their funds in assets in order to spread the investment risks and to ensure for their investors the benefit of the result of the management of their assets, and
- whose securities are reserved to one or more informed investors, and
- whose articles of incorporation provide that the amount of the capital shall at all times be equal to the net asset value of the company.
Art.26.
SICAVs shall be subject to the provisions applicable to commercial companies, insofar as the present law does not derogate therefrom.
Art.27.
The subscribed capital of the SICAV, increased by issuance premiums, may not be less than one million two hundred and fifty thousand euros (EUR 1.250.000). This minimum must be reached within a period of twelve months following the authorisation of the SICAV. A grand-ducal regulation may increase such minimum amount to a higher figure subject to a maximum of two million five hundred thousand euros (EUR 2.500.000).
Art.28.
1. The SICAV may issue its securities at all times, unless otherwise provided for in its articles of incorporation.
2. The issue and, the case being, repurchase of securities ate made according to the modalities and forms provided for in the articles of incorporation.
3. The capital of a SICAV must be entirely subscribed and the amount of the subscription must be paid-up for at least 5% per share or security, by a contribution in cash or in kind.
4. Unless otherwise provided for by the articles of incorporation, the valuation of the assets of the SICAV is based on the fair value. This value must be determined following the modalities laid down in the articles of incorporation.
5. The articles of incorporation provide for the conditions under which issues and repurchases may be suspended, without prejudice to the legal grounds. In case of suspension of the issue or repurchase, the SICAV must inform the CSSF thereof immediately.
In the interest of shareholders or holders of securities, repurchases may be suspended by the CSSF in case the legal, regulatory or statutory provisions concerning the activity and the functioning of the SICAV are not complied with.
6. The articles of incorporation indicate the nature of the fees charged to the SICAV.
7. The shares or securities of a SICAV are without a par value.
8. The share or security indicates the amount of the minimum corporate capital and do not include an indication as to the par value or as to the portion of the corporate capital it represents.
Art.29.
1. Variations in the capital shall be effected ipso jure and without compliance with measures regarding publication and entry in the company.
2. Repayments to investors following a reduction of capital shall not be subject to any restriction other than the one provided for by Article 31, paragraph (1).
3. In the case of issue of new shares or securities, pre-emptive rights may not be claimed by existing shareholders or holders of securities, unless the articles of incorporation provide for such a right by express provision.
Art.30.
1. If the capital of the SICAV falls below two thirds of the minimum capital as defined in Article 27, the directors or managers must submit the question of the dissolution of the SICAV to a general meeting for which no quorum shall be prescribed and which shall decide by a simple majority of the shares or securities represented at the meeting.
2. If the capital of the SICAV falls below one fourth of the minimum capital as defined in Article 27, the directors or managers must submit the question of the dissolution of the SICAV to a general meeting for which no quorum shall be prescribed; dissolution may be resolved by shareholders or holders of securities holding one fourth of the shares or securities represented at the meeting.
3. The meeting must be convened so that it is held within a period of 40 days as from the ascertainment that the net assets have fallen below two thirds or one fourth of the minimum capital as defined in Article 27, as the case may be.
4. In case the constitutive documents of the SICAV do not provide for general meetings, the managers must inform the CSSF immediately in case the capital of the SICAV has fallen below two thirds of the minimum capital as defined in Article 27. In this last case, the CSSF may, taking into account the circumstances, oblige the managers to put the SICAV into liquidation.
Art.31.
1. Unless otherwise provided for in the articles of incorporation, the net assets of the SICAV may be distributed subject to the limits set out in Article 27 of this law.
2. SICAVs shall not be obliged to create a legal reserve.
3. SICAVs are not subject to rules in respect of payment of interim dividends, other than those provided for in their articles of incorporation.
Art.32.
For companies to which this law applies, the words “société en commanite par action” [partnership limited by shares], “société à responsabilité limitée” [private limited company], "société anonyme" [public limited company] or “société cooperative organisée sous forme de société anonyme” [co-operative company organised under the form of a public limited company] shall be supplemented by the words "société d'investissement à capital variable - fonds d'investissement spécialisé" [investment company with variable capital – special investment fund] or by, “SICAV-FIS".
Art.33.
The custody of the assets of a SICAV must be entrusted to a depositary.
Art.34.
1. The depositary must either have its registered office in Luxembourg or be established in Luxembourg if its registered office is in another Member State of the European Union.
2. The depositary must be a credit institution within the meaning of the Law of 5 April 1993 relating to the financial sector, as amended.
3. The depositary's liability shall not be affected by the fact that it has entrusted all or some of the assets in its custody to a third party.
Art.35.
The depositary shall, in accordance with Luxembourg Law, be liable to the investors for any loss suffered by them as a result of its wrongful failure to perform its obligations or its wrongful improper performance thereof.
Art.36.
The duties of the depositary regarding the SICAV shall cease:
a) in the case of voluntary withdrawal of the depositary or of its removal by the SICAV; until it is replaced, which must happen within two months, the depositary shall take all necessary steps for the good preservation of the interests of the shareholders;
b) where the SICAV or the depositary has been declared bankrupt, has entered into a composition with creditors, has obtained a suspension of payment, has been put under court controlled management or has been the subject of a similar measure or has been put into liquidation;
c) where the CSSF withdraws its authorisation of the SICAV or the depositary;
d) in all other cases provided for in the articles of incorporation.
Art.37.
In carrying out its role as depositary, the depositary must act solely in the interest of the investors.
Chapter 4
Specialised investment funds which have not been constituted as collective investment funds or SICAVs
Art.38.
Specialised investment funds governed by the present law that do not have one of the legal forms of collective investment funds or SICAV are submitted to the provisions of the present Chapter.
Art.39.
1. The subscribed capital, increased by issuance premiums, of specialised investment funds submitted to this Chapter, may not be less than one million two hundred and fifty thousand euros (EUR 1.250.000).
This minimum must be reached within a period of twelve months following their authorisation. A grand-ducal regulation may increase such minimum amount to a higher figure subject to a maximum of two million five hundred thousand euros (EUR 2.500.000).
2. If the capital falls below two thirds of the minimum capital as defined under paragraph (1), the directors or managers must submit the question of the dissolution of the specialised investment fund to a general meeting for which no quorum shall be prescribed and which shall decide by a simple majority of the securities represented at the meeting.
3. If the capital falls below one fourth of the minimum capital as defined under paragraph (1), the directors or managers must submit the question of the dissolution to a general meeting for which no quorum shall be prescribed; dissolution may be resolved by investors holding one fourth of the securities represented at the meeting.
4. The meeting must be convened so that it is held within a period of 40 days as from the ascertainment that the net assets have fallen below two thirds or one fourth of the minimum capital as defined under paragraph (1), as the case may be.
5. In case the constitutive documents of the specialised investment fund do not provide for general meetings, the directors or managers must inform the CSSF immediately in case the capital of the SICAV has fallen below two thirds of the minimum capital as defined under paragraph (1). In this last case, the CSSF may, taking into account the circumstances, oblige the directors or the managers to put the specialised investment fund into liquidation.
6. In the case the specialised investment fund is set up under statutory form, its capital must be entirely subscribed and paid-up for at least 5% by way of a contribution in cash or in kind.
Art.40.
1. Unless otherwise provided for in the constitutive documents, the valuation of the assets of the specialised investment fund is based on the fair value. This value must be determined in accordance with the modalities described in the constitutive documents.
2. Articles 28 (5), 33, 34, 35, 36 and 37 of the present law are applicable to specialised investment funds under this Chapter.
3. The denomination of the specialised investment funds submitted to the present Chapter 4 is supplemented by the words “fonds d’investissement specialisé” [specialised investment fund] or “FIS” [SIF].
Chapter 5
Authorisation and supervision
Art.41.
1. The authority which is to carry out the duties provided for in the present law is the CSSF.
2. The CSSF carries out its duties exclusively in the interest of the public.
3. The CSSF takes care of the application, by specialised investment funds submitted to the present law and by their directors, of the applicable legal and contractual provisions.
Art.42.
1. In order for specialised investment funds submitted to the present law to exercise their activities, they must be authorised by the CSSF.
2. A specialised investment fund shall be authorized only if the CSSF approves the constitutional documents and the choice of the depositary.
3. The directors of the specialised investment fund and of the depositary must be of sufficiently good repute and be sufficiently experienced also in relation to the type of specialised investment fund concerned. To that end, the names of the directors, and of every person succeeding them in office, must be communicated forthwith to the CSSF.
"Directors" shall mean, in the case of public limited companies and of co-operative companies organised under the form of a public limited company, the members of the board of directors, in the case of partnerships limited by shares, the general partners, in the case of private limited companies the manager(s) and in the case of collective investment funds, the members of the board of directors or the managers of the management company.
4. The replacement of the management company or of the depositary and the amendment of the constitutional documents of the specialised investment fund are subject to approval by the CSSF.
Art.43.
1. Authorized specialised investment funds shall be entered by the CSSF on a list. Such entry shall be tantamount to authorisation and shall be notified by the CSSF to the specialised investment fund concerned. Applications for entry on the list must be filed with the CSSF within the month following their constitution or formation. The said list and any amendments made thereto shall be published in the Mémorial by the CSSF.
2. The entering and the maintaining on the list referred to in paragraph (1) shall be subject to observance of all the provisions of laws, regulations or agreements relating to the organisation and operation of specialised investment funds submitted to the present law and the distribution, placing or sale of their securities.
Art.44.
The fact that a specialised investment fund is entered in the list referred to in Article 43, paragraph (1) shall not under any circumstance be described in any way whatsoever as a positive assessment made by the CSSF of the quality of the units offered for sale.
Art.45.
1. The decisions to be adopted by the CSSF in implementation of the present law shall state the reasons on which they are based and, unless the delay entails risks, they shall be adopted after "instruction contradictoire", [proceedings at which the parties are able to state their case]. They shall be notified by registered letter or delivered by "huissier" [bailiff, officer of the Court].
2. The decisions by the CSSF concerning the grant, refusal or withdrawal of the authorisations provided for in this law may be referred to ”Tribunal Administratif” [Administrative Tribunal] which will be dealing with the substance of the case. The appeal must be filed within one month from the date of notification of the contested decision, or else shall be time barred.
Chapter 6
Dissolution and liquidation
Art.46.
The decision of the CSSF withdrawing a specialised investment fund submitted to the present law from the list provided for in Article 43, paragraph (1) shall ipso jure entail, as from the notification thereof to and against the specialised investment fund in question and until the decision has become final, suspension of any payment by the said specialised investment fund and prohibition for such specialised investment fund, on pain of nullity, to take any measures other than protective measures, except with the authorisation of the "commissaire de surveillance" [supervisory commissioner]. The CSSF shall ipso jure hold the office of supervisory commissioner, unless at its request, the District Court dealing with commercial matters appoints one or more supervisory commissioners. The application, stating the reasons on which it is based and accompanied by supporting documents, shall be lodged for that purpose at the Registry of the District Court in the district within which the specialised investment fund has its registered office.
The Court shall give its ruling within a short period.
If it considers that it has sufficient information, it shall immediately make an order in public session, without hearing the parties. If it deems necessary, it shall convene the parties by notification from the Registrar within three days from the filing of the application. It shall hear the parties in chambers and give its decision in public session.
The written authorisation of the supervisory commissioners is required for all measures and decisions of the specialised investment fund and, failing such authorisation, they shall be void.
The Court may, however, limit the scope of operations subject to authorisation.
The commissioners may submit for consideration to the relevant bodies any proposals which they consider appropriate. They may attend proceedings of the administrative management, executive and supervisory bodies of the specialised investment fund.
The Court shall decide as to the expenses and fees of the supervisory commissioners; it may grant them advances.
The judgment provided for in paragraph (1) of Article 47 of the present law shall terminate the functions of the supervisory commissioner who must, within one month after his replacement, submit to the liquidators appointed in such judgment a report on the use of the specialised investment fund’s assets together with the accounts and supporting documents.
If the withdrawal decision is amended on appeal in accordance with Article 45, paragraph (2) above, the supervisory commissioner shall be deemed to have resigned.
Art.47.
1. The District Court dealing with commercial matters shall, at the request of the Public Prosecutor, acting on its own motion or at the request of the CSSF, pronounce the dissolution and order the liquidation of the specialised investment funds referred to in the present law, whose entry on the list provided for in Article 43, paragraph (1) has finally been refused or withdrawn.
When ordering liquidation, the Court shall appoint a 'juge-commissaire', [reporting judge] and one or more liquidators. It shall determine the method of liquidation. It may render applicable to such extent as it may determine the rules governing liquidation in bankruptcy. The method of liquidation may be changed by subsequent decision, either of the Court's own motion or at the request of the liquidator(s).
The Court shall decide as to the expenses and fees of the liquidators; it may grant advances to them. The judgment pronouncing dissolution and ordering liquidation shall be enforceable on a provisional basis.
2. The liquidator(s) may bring and defend all actions on behalf of the specialised investment fund, receive all payments, grant releases with or without discharge, realise all the assets of the specialised investment fund and reemploy the proceeds therefrom, issue or endorse any negotiable instruments, compound or compromise all claims. They may alienate immovable property of the specialised investment fund by auction.
They may also but only with the authorisation of the Court, mortgage and pledge its assets and alienate its immovable property by private treaty.
3. As from the day of the judgment, no legal actions relating to movable or immovable property nor any enforcement procedures relating to movable or immovable property may be pursued, commenced or exercised otherwise than against the liquidators.
The judgment ordering liquidation shall terminate all seizures effected at the instance of general creditors who have no charges on movable and immovable property.
4. After payment or payment into court of the sums necessary for the discharge of the debts, the liquidators shall distribute to holders of securities the sums or amounts due to them.
5. The liquidators may convene at their own initiative and must convene at the request of holders of securities representing at least one fourth of the assets of the specialised investment fund a general meeting of holders of securities for the purpose of deciding whether instead of an outright liquidation it is appropriate to contribute the assets of the specialised investment fund in liquidation to another specialised investment fund. That decision shall be taken, provided that the general meeting is composed of a number of holders of securities representing at least one half of the outstanding securities or capital, by a majority of two thirds of the votes of the holders of securities present or represented.
6. The judicial decisions pronouncing the dissolution and ordering the liquidation of a specialised investment fund shall be published in the Memorial and in two newspapers with adequate circulation specified by the Court, one of which at least must be a Luxembourg newspaper. The liquidator(s) shall arrange for such publications.
7. If there are no or insufficient assets, as ascertained by the reporting judge, the documents relating to the proceedings shall be exempt from any registry and registration duties and the expenses and fees of the liquidators shall be borne by the Treasury and paid as judicial costs.
8. The liquidators shall be responsible both to third parties and to the specialised investment fund for the discharge of their duties and for any faults committed in the conduct of their activities.
9. When the liquidation is completed, the liquidators shall report to the Court on the use made of the funds of the specialised investment fund and shall submit the accounts and supporting documents thereof. The Court shall appoint auditors to examine the documents. After receipt of the auditors' report, a ruling shall be given on the management of the liquidators and the closure of the liquidation.
The closure of the liquidation shall be published in accordance with paragraph (6) above. Such publication shall also indicate:
- the place designated by the Court where the books and records must be kept for at least five years;
- the measures taken in accordance with Article 50 with a view to the payment into court of the sums and funds due to creditors, unit-holders or members to whom it has not been possible to deliver the same.
10. Any legal actions against the liquidators of specialised investment funds, in their capacity as such, shall be prescribed five years after publication of the closure of the liquidation provided for in paragraph (9).
The legal actions against the liquidators in connection with the performance of their duties, shall be prescribed five years after the date of the facts or in the event of concealment thereof by wilful misconduct, five years after the discovery thereof.
11. The provisions of this Article shall equally apply to the specialised investment funds which have not applied to be entered on the list provided for in Article 43 within the time limit laid down therein.
Article 48.
1. Specialised investment fund shall, after dissolution, be deemed to exist for the purpose of liquidation. In the case of a non-judicial liquidation, they shall remain subject to supervision by the CSSF.
2. All documents issued by a specialised investment fund in liquidation shall indicate that it is in liquidation.
Article 49.
1. In the event of a non-judicial liquidation of a specialised investment fund, the liquidator(s) must be approved by the CSSF. The liquidator(s) must provide all guarantees of honorability and professional skill.
2. Where a liquidator does not accept office or is not approved, the District Court dealing with commercial matters shall, at the request of any interested party or of the CSSF, appoint the liquidator(s). The judgment appointing the liquidator(s) shall be provisionally enforceable, on the production of the original thereof and before registration, notwithstanding any appeal or objection.
Article 50.
In the event of a voluntary or compulsory liquidation of a specialised investment fund within the meaning of the present law, the sums and assets payable in respect of securities whose holders failed to present themselves at the time of the closure of the liquidation, shall be paid to the "Caisse des Consignations" to be held for the benefit of the persons entitled thereto.
Article 51.
1. The directors, managers and officers of specialised investment funds subject to supervision by the CSSF as well as the liquidators in the case of voluntary liquidation of a specialised investment fund may have imposed upon them by the said authority a fine of fifteen to five hundred euros in the event of their refusing to provide the financial reports and the requested information or where such documents prove to be incomplete, inaccurate or false, in the event of any infringement of Article 52 of the present law or in the event of any other serious irregularity being recorded.
2. The same fine shall be imposed upon any person who infringes the provisions of Article 44.
Chapter 7
Establishment of an issuing document and of an annual report
Article 52.
1. The investment company and, for each collective investment fund it manages, the management company must publish:
- an issuing document, and
- one annual report per financial year.
2. The annual report must be put at the disposal of the investors within six months, with effect from the end of the periods to which this report relates.
3. In case a prospectus has been published in accordance with the law of 10 July 2005 relating to prospectuses for transferable securities, there is no obligation to establish an issuing document within the meaning of the present law.
4. Notwithstanding paragraphs (1) and (2) of Articles 29 and 30 of the law of 19 December 2002 relating to the company register as well as the account keeping and annual accounts of companies, the specialised investment funds submitted to this law prepare their annual account in accordance with the Exhibit to the present law. The annual report must include a balance-sheet or a statement of assets and liabilities, a detailed income and expenditure account for the financial year, a report on the activities of the financial year as well as any other significant information permitting investors to judge, with full knowledge of the facts, the evolution of the activity and the results of the specialised investment fund. Articles 56 and 57 of the law of 19 December 2002 relating to the company register as well as the account keeping and annual accounts of companies apply however to specialised investment funds submitted to Chapter 3 and to Chapter 4 of this law.
5. Notwithstanding Article 309 of the law of 10 August 1915 on commercial companies, as amended, specialised investment funds under this law as well as their subsidiaries are exempt from the obligations to consolidate the companies held for investment purposes.
Article 53.
The issuing document must include the information necessary for investors to be able to make an informed judgment of the investment proposed to them and, in particular, of the risks attached thereto.
Article 54.
The essential elements of the issuing document must be kept up to date at the moment of the issue of additional securities to new investors.
Article 55.
1. Luxembourg specialised investment funds must have the accounting information given in their annual report audited by a "réviseur d'entreprises agréé" [authorized independent auditor].
The auditor’s report, including any matters in respect of which the audit opinion is qualified, shall be reproduced in full within the annual report. The auditor shall be suitably qualified in terms of relevant professional experience.
2. The auditor shall be appointed and remunerated by the specialised investment fund.
3. The auditor shall rapidly inform the CSSF of any fact or decision it has become aware of in the exercise of the control of accounting information mentioned in the annual report of a specialised investment fund or in another legal mission to the specialised investment fund, when this fact or decision is susceptible to:
- constitute a serious violation of the provisions of this law or of the regulatory provisions implementing this law, or
- interfere with the continuity of the operations of the specialised investment fund, or
- involve the refusal of certification of accounts or the issue of reserves relating thereto.
The auditor shall moreover rapidly inform the CSSF, in the performance of its mission referred to in the preceding paragraph to a specialised investment fund, of all fact or decision regarding the specialised investment fund fulfilling the criteria enumerated in the preceding paragraph of which it had knowledge during the control of accounting information mentioned in the annual report of the specialised investment fund or during another legal mission to another undertaking linked to this specialised investment fund by a link of authority.
For the purpose of this Article, the term “link of authority” shall mean the link between a parent company and a subsidiary in the cases referred to in Article 77 of the Law of 17 June 1992 relating to the annual accounts and consolidated accounts of credit institutions, as amended, or a relation of the same kind between any natural or legal person and a company; any subsidiary of a subsidiary shall also be considered as a subsidiary of the parent company which is the ultimate parent of these companies. Shall also be regarded as constituting a link of authority between two or more natural or legal persons, a situation in which these persons are durably linked to a same person by a link of authority.
If, in the performance of his duties, the auditor obtains knowledge of the fact that the information provided to investors or to the CSSF in the reports or other documents of the specialised investment fund, does not truly describe the financial situation and the state of assets and liabilities of the specialised investment fund, it shall be obliged to inform the CSSF forthwith.
The auditor shall moreover be obliged to provide the CSSF with all information or certifications required by the latter on any matters of which the auditor has or ought to have knowledge during the performance of its duty. The same applies if the auditor obtains knowledge that the assets of the specialised investment fund are not or have not been invested according to the rules set out by law or the issuing document.
The disclosure in good faith to the CSSF by an auditor of facts or decisions referred to in this paragraph do not constitute a violation of professional secrecy or a violation of whatsoever restriction on the disclosure of information contractually imposed on the auditor and do not involve any kind of responsibility for the auditor.
The CSSF may establish rules governing the scope of the audit engagement and the content of the annual audit report.
The CSSF may instruct an auditor to perform tests of one or more specific aspects of the business and operations of a specialised investment fund. Such additional work shall be performed at the expense of the specialised investment fund concerned.
4. The CSSF shall refuse or withdraw the entry on the list of specialised investment funds whose auditor does not satisfy the conditions or discharge the obligations prescribed in this Article.
5. The institution of "commissaires aux comptes" (statutory auditors) provided for by Articles 61, 109, 114 and 200 of the Law of 10th August 1915 on commercial companies, as amended, is repealed with respect to Luxembourg investment companies. The directors or managers are solely competent in all cases the Law of 10th August 1915 on commercial companies, as amended, provides for the joint action of the statutory auditors and the directors.
The institution of commissaire aux comptes provided for by Article 151 of the Law of 10 August 1915 on commercial companies, as amended, is abolished with respect to Luxembourg investment companies. On the conclusion of the liquidation, a Liquidation Report shall be prepared by the auditor. This Report shall be presented to the General Meeting which hears the report of the Liquidators on the application of the undertaking’s assets supported by the appropriate documentary evidence. This same General Meeting shall consider and vote upon the adoption of the liquidation accounts, the discharge and the closure of the liquidation.
Article 56.
Specialised investment funds must transmit their issuing document as well as any amendments thereto to the CSSF.
Article 57.
1. The issuing document as well as the last published annual report shall be provided free of charge to the subscribers who so request.
2. The annual report shall be provided free of charge to the investors who so request.
Chapter 8
Transmission of other information to the CSSF
Article 58.
The CSSF may request the specialised investment funds to provide any useful information relevant to the performance of its mission and may, to that end, itself or through its delegates examine the books, accounts, registers or other records and documents of the specialised investment funds.
Chapter 9
Protection of name
Article 59.
1. No undertaking shall make use of designations or of a description giving the impression that its activities are subject to the legislation on specialised investment funds if it has not obtained the authorisation provided for in Article 43 of the present law.
2. The District Court dealing with commercial matters of the place where the specialised investment fund is situated or of the place where the designation has been used, may at the request of the Public Prosecutor issue an injunction, prohibiting anyone to use the designation as defined in paragraph (1), if the conditions provided for by the present law are not or no longer met.
3. The final judgment having force of res judicata of the District Court, of the Court of Appeals or of the Supreme Court which delivers this injunction, is published by the Public Prosecutor and at the expense of the person sentenced in two Luxembourg or foreign newspapers with adequate circulation.
Chapter 10
Criminal law provisions
Article 60.
A penalty of imprisonment from one month to one year and a fine of five hundred to twenty five thousand euros or either such penalty shall be imposed upon:
a) any person who has issued or repurchased or caused to be issued or repurchased units of a collective investment fund in the cases referred to in Articles 11 (3) and 20 (3) of the present law;
b) any person who has issued or repurchased units of a collective investment fund at a price other than that obtained by application of the criteria provided for in Article 8 of the present law;
c) any person who, as director, manager or auditor of the management company or the depositary has made loans or advances on units of the collective investment fund using assets of the said fund, or who has by any means at the expense of the collective investment fund, made payments in order to pay up units or acknowledged payments to have been made which have not actually been so made.
Article 61.
1. A penalty of imprisonment from one to six months and a fine of five hundred to twenty five thousand euros or either of such penalties shall be imposed upon:
a) any director or manager of the management company who has failed to inform the CSSF without delay that the net assets of the collective investment fund have fallen below two thirds and one fourth respectively of the legal minimum for the net assets of the collective investment fund;
b) any director or manager of the management company who has infringed Article 9 of the present law
2. A fine of five hundred to twenty five thousand euros shall be imposed upon any persons who in infringement of Article 59 purport to use a designation or description giving the impression that they relate to the activities subject to the legislation on specialised investment funds if they have not obtained the authorisation provided for in Article 43 of the present law.
Article 62.
A penalty of imprisonment from one month to one year and a fine of five hundred to twenty five thousand euros or either of such penalties shall be imposed upon the founders, directors or managers of an investment company who have infringed the provisions of Articles 28 (2) and 28 (4).
Article 63.
A penalty of imprisonment of one month to one year and a fine of five hundred to twenty five thousand euros or either of such penalties shall be imposed upon the directors or managers of an investment company who have not convened the extraordinary general meeting in accordance with Article 30 of this Law and with Article 39 (1) to (4) of the present law or who have not respected Article 39 (5) of the present law.
Article 64.
A penalty of imprisonment of three months to two years and a fine of five hundred to fifty thousand euros or either of such penalties shall be imposed on anyone who has carried out or caused to be carried out operations involving the receipt of savings from investors without having introduces, on behalf of the specialised investment fund for which they were acting, a request to be entered on the list with the CSSF in the month having followed the incorporation or creation of a specialised investment fund.
Article 65.
1. A penalty of imprisonment from one month to one year and a fine of five hundred to twenty five thousand euros or either of such penalties shall be imposed on the persons operating specialised investment funds of the kind referred to in Article 38 who failed to observe the conditions imposed upon them by this law.
2. The same penalties or either of them only shall be imposed upon persons operating specialised investment funds that, notwithstanding the provisions of Article 46, have taken measures other than protective measures without being authorized for that purpose by the supervisory commissioner.
Chapter 11
Fiscal provisions
Article 66.
1. Apart from the capital duty levied on the contribution of capital to civil and commercial companies and the subscription tax mentioned in Article 68 below, no other tax shall be payable by the specialised investment funds referred to in the present law.
2. Without prejudice to the provisions of the law of 21 June 2005 transposing into Luxembourg law directive 2003/48/EC relating to savings tax under the form of interest payments, distributions made by specialised investment funds are made without withholding tax. They are not taxable if received by non-residents.
Article 67.
1. By way of derogation from the Law of 29th December 1971 on the tax levied on contribution of capital to civil and commercial companies and amending certain legislative provisions governing the collection of registration duties, the capital duty payable at the time of the constitution of a specialised investment fund governed by this law or during the conversion of an undertaking for collective investment governed by the law of 20 December 2002 relating to undertakings for collective investment, as amended into a specialised investment fund or subsequently, in particular when new contributions are made, or when a specialised investment fund governed by this law is converted into another specialised investment fund governed by this Law or into an undertaking for collective investment governed by the law of 20 December 2002 relating to undertakings for collective investment, as amended or when a specialised investment fund governed by this law is merged into another specialised investment fund governed by this law or with an undertaking for collective investment governed by the law of 20 December 2002 relating to undertakings for collective investment, as amended, may be paid as a fixed charge the amount of which shall be determined for each type of taxable operation. The modalities and the amount of the fixed charge are determined by grand-ducal regulation, where, such amount may not exceed one thousand two hundred fifty euros (EUR 1.250).
2. Capital duty on contributions made after the constitution of SICAVs is payable only insofar as the amount of the new company funds exceeds the amount which was taxed previously.
3. A grand-ducal regulation shall lay down the detailed procedures for the termination and the collection of the said tax.
Article 68.
1. The rate of the annual subscription tax payable by the specialised investment funds referred to in this law shall be of 0.01%.
2. Are exempt from the subscription tax:
a) the value of the assets represented by units held in other undertakings for collective investment already submitted to the subscription tax provided for by this Article or by Article 129 of the law of 20 December 2002 relating to undertakings for collective investment, as amended
b) specialised investment funds as well as individual compartments of multiple compartments specialised investment funds:(i) the exclusive object of which is the collective investment in money market instruments and the placing of deposits with credit institutions; and
(ii) the residual weighted maturity of the portfolio does not exceed 90 days, and
(iii) that benefit from the highest possible rating of a recognised rating agency.c) specialised investment funds the securities of which are reserved to (i) professional retirement institutions or similar investment vehicles, created on the initiative of one or several employers for the benefit of their employees and (ii) companies of one or several employers investing the funds they hold to furnish a retirement service to their employees.
3. A grand ducal regulation shall determine the conditions necessary for the application of the exemption and the criteria with which the money market instruments referred to above must comply with.
4. The taxable basis of the subscription tax shall be the aggregate net assets of the specialised investment funds as valued on the last day of each quarter.
5. The provisions of paragraph (2) c) mutatis mutandis apply:
- to individual compartments the securities of which are reserved to (i) professional retirement institutions or similar investment vehicles, created on the initiative of one or several employers for the benefit of their employees and (ii) companies of one or several employers investing the funds they hold to furnish a retirement service to their employees of a specialised investment fund with multiple compartments, and
- to individual classes the securities of which are reserved to (i) professional retirement institutions or similar investment vehicles, created on the initiative of one or several employers for the benefit of their employees and (ii) companies of one or several employers investing the funds they hold to furnish a retirement service to their employees created within a specialised investment fund or within a compartment of a specialised investment fund with multiple compartments.
Article 69.
The duties of the "Administration de I'Enregistrement" (registration administration) include the fiscal control of specialised investment funds.
If, at any date after the constitution of the specialised investment funds referred to in this law, the said administration ascertains that such specialised investment funds are engaging in operations which fall outside the framework of the activities authorized by this law, the fiscal provisions provided for in Articles 66 to 68 shall cease to be applicable.
Moreover, the registration administration may levy a fiscal fine of 0.2% on the aggregate amount of the assets of the undertakings.
Chapter 12
Special provisions in relation to the legal form
Article 70.
1. The investment companies entered in the list provided for by Article 43, paragraph (1) may be converted into SICAVs and their articles of incorporation may be brought into harmony with the provisions of Chapter 3 of this law by resolution of a general meeting passed at a majority of two thirds of the votes of the shareholders present or represented regardless of the portion of the capital represented.
2. The collective investment funds referred to in this law may, on the same conditions as those laid down in paragraph (1) above, convert themselves into a SICAV governed by the present law.
Article 71.
1. Specialised investment funds may be constituted with multiple compartments each corresponding to a different part of the assets and liabilities of the specialised investment fund.
2. This possibility and the modalities in this respect must be expressly provided for in the constitutional documents of the specialised investment fund. The issuing document must describe the specific investment policy of each compartment.
3. The shares and units of specialised investment fund with multiple compartments may be of different value with or without indication of par depending on the legal form which has been chosen.
4. Collective investment funds with multiple compartments may determine in separate management regulations the characteristics and rules applicable to each compartment.
5. The rights of investors and creditors regarding a compartment or arising from the constitution, operation or liquidation of a compartment are limited to the assets of this compartment, unless otherwise provided for in the constitutional documents.
The assets of a compartment will be answerable exclusively for the rights of the investors relating to this compartment and for those of the creditors whose claim arose in relation to the constitution, operation or liquidation of this compartment, unless otherwise provided for in the constitutional documents.
In the relation between investors, each compartment will be deemed to be a separate entity, unless otherwise provided for in the constitutional documents.
6. Each compartment of a specialised investment fund may be liquidated separately and the liquidation of a compartment shall not lead to the liquidation of another compartment. Only the liquidation of the last compartment of the specialised investment fund leads to the liquidation of the specialised investment fund within the meaning of Article 49 (1) of the present law.
Chapter 13
Amending provisions
Article 72.
Paragraph (3) of Article 129 of the law of 20 December 2002 on undertakings for collective investment, as amended, is modified by the adding, at the end of point a), of the terms “or by Article 68 of the law of 13 February 2007 on specialised investment funds.”
Article 73.
To Article 44 paragraph 1 sub d) of the law of 12 February 1979 in value added tax, as amended, the words “and of specialised investment funds” are added after the words “…, including SICARs”.
Chapter 14
Transitional and repealing provisions
Article 74.
The law of 19 July 1991 relating to undertakings for collective investment the securities of which are not intended to be placed with the public is repealed.
Article 75.
All references in the legal and regulatory texts to “ undertakings governed by the law of 19 July 1991 relating to undertakings for collective investment the securities of which are not intended to be placed with the public” are to be replaced by “undertakings governed by the law of 13 February 2007 relating to specialised investment funds”.
Article 76.
Undertakings submitted to the law of 19 July 1991 relating to undertakings for collective investment the securities of which are not intended to be placed with the public will be ipso jure governed by this law.
For these undertakings, all references in the articles of incorporation and the sales documents to the law of 19 July 1991 relating to undertakings for collective investment the securities of which are not intended to be placed with the public are to be read as references to this law.
Chapter 15
Final provisions
Article 77.
The reference to this law may be made under abbreviated form by recourse to the title “law of 13 February 2007 relating to specialised investment funds”.
Article 77.
This law enters into force on 13 February 2007.
APPENDIX
Information to be included in the annual report
I. Statement of assets and liabilities
- investments;
- bank balances,
- other assets,
- total assets,
- liabilities,
- net asset value
II. Number of units in circulation
III. Net asset value per unit
IV. Qualitative and/or quantitative information on the portfolio of investments permitting to investors to make a well informed judgement on the evolution of the activity and the results of the specialised investment fund
V. Indication of movements of the assets of the specialised investment fund during the reference period, including the following data:
- income from investments,
- other income,
- management charges,
- depositary’s charges,
- other charges and taxes,
- net income,
- distributions and income reinvested,
- increase or decrease of capital account,
- appreciation or depreciation of investments,
- any other changes affecting the assets and liabilities of the specialised investment fund
VI. Comparative table covering the last three financial years and including, for each financial year, at the end of the financial year:
- the total net asset value,
- the net asset value per unit.