Luxembourg regime derived from the AIFMD and help you determine, depending on your assets under management and the specific features of your fund, whether you will be qualified as: a sub-threshold AIFM, that will be subject to a few obligations under the AIFMD but will not benefit from the management and marketin When conducting marketing activities in Luxembourg, the sub-threshold AIFM must ensure that the marketing activities do not fall within the definition of an offer to the public and meets the private placement exemptions set out, among other in (i) Art. 1 Sec. 4 of the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing. In addition, some EU jurisdictions permit marketing by EU sub-threshold managers of a Luxembourg fund, with a regulatory burden that is lighter than their NPPR regime, and no NPPR application is required for marketing Luxembourg investors. A sub-threshold AIFM can only be an entity with legal personality managing a portfolio of AIFs whose.
Below-threshold AIFM: AIFM that manages portfolios of AIFs whose assets under management in total do not exceed the thresholds under article 3(2) of the Law of 201 Appointment of regulated AIFM is not mandatory, if sub-threshold (below EUR 100 Million). EU passporting possible through AIFM.. No Custodian required, if sub-threshold; Tax transparent fund. Can invest in any asset type. High contractual flexibility. What are the costs of establishing an alternative investment fund in Luxembourg An Alternative Investment Fund Manager (AIFM) is any legal person whose regular business is managing one or more alternative investment funds (AIFs). AIFMs are governed by the Law of 12 July 2013 on alternative investment fund managers. The CSSF's prudential supervision aims to verify that AIFMs subject to its supervision continuously observe all. An external AIFM can be established in Luxembourg, in another EU Member State or in a third country. Smaller AIFMs are those that manage AIFs which do not exceed the following thresholds in terms of AuM: AIFs which are not leveraged and without redemption rights for a period of five years, and with aggregate AuM below EUR 500 million If the thresholds are exceeded, the AIFM requires full substance under the AIFMD Law: this means thorough organisation. If the set-up costs for a fully licensed AIFM are too high, the SIF or SICAR can appoint an existing fully licensed third-party AIFM
Despite the delegation, the Luxembourg management company should be considered as the AIFM under the AIFMD, responsible for the compliance with the AIFMD as the case may be. The US AIF manager must however be supervised in the US and be submitted the to the Luxembourg management company's due diligence check AIFMs exceeding the threshold and sub-threshold AIFMs that opt in, are required to be authorised by the CSSF and will have access to the EEA marketing passport. Under certain circumstances and in a case where the legal form of the AIF allows for internal management, a self-managed or internally managed AIF may itself be considered to be the AIFM
AIFMD & ELTIF Reviews 4 Luxembourg Market Pulse Regulatory Update December 2020. ESMA calls for targeted clarifications in the Directive concerning certain definitions, sub-threshold AIFMs, digitalisation and the application of depositary rules to central securities depositaries A sub-threshold AIFM is in general an AIFM that manages a maximum of EUR 500 million of assets or, where leveraged, a maximum of EUR 100 million of assets. The information required in the reports is specified by an over 20 pages long annex template of the Level II Regulation to the AIFMD
. Such AIFMs cannot therefore avail themselves of a pan-European marketing in relation to the AIFs they manage and do not have the right to market AIFs they manage to investors in other EU states Managers who fall below a de minimus threshold of €100m, or €500m with a five year lock-up, can side-step most of the regime as they do not require authorization but must still register. These 'small authorized AIFMs' do not have a right to market AIFs they manage to other EU member state AIFMD in Luxembourg The law of 12 July 2013 relating to AIFs with assets under management in total not exceeding a threshold of EUR 500 million, Sub-delegation is possible. In any case, AIFM remains liable of the correct performance of the delegated functions and services Sub-threshold AIFMs Certain AIFMs are exempt from the majority of the requirements of the AIFMD and the Jersey AIF Code on the basis that the values of the assets they manage fall below certain prescribed thresholds, namely: (i) leveraged funds valued at less than €100 million; or (ii) unleveraged closed-ended funds valued at less than €500 million
Sub-threshold AIFM Meet both conditions Don't meet both conditions Internal manager of an AIF May manage EuSEF and EuVECA AIFs Not managing property AIFs and not an internal manager AUM above €500m Above threshold AIFM All AIFs, including EuSEF / EuVECA Full scope UK AIFM only (internal or external manager) Small authorised UK AIFM option available Sub threshold marketing means marketing an EU fund of under Euro 500,000 (for a closed-ended PE type fund, the figure would be 100,000 for an open-ended fund). Marketing an EU feeder fund which falls below the threshold can be done in certain jurisdictions with more lenient requirements So, the first thing to consider is the size threshold imposed by AIFMD. When the cumulative AUMs of the portfolio of AIFs managed by an AIFM does not hit the following sizes, the AIFMs will be considered to be sub-threshold. Euro 100mm, including any assets acquired through the use of leverage; Euro 500mm, where the portfolio of AIFs consists. If the Luxembourg management company is not authorized as a Luxembourg AIFM 15, and Guidelines on key concepts of the AIFMD. 8 The sub-threshold exemption applies to AIFMs managing assets below EUR 100 million or AIFMs managing assets below EUR 500 million provided no redemption rights are granted to investors during a minimum.
AIFM respectively a registered sub-threshold AIFM or a non-EU AIFM • To be subject to AIFMD or SIF Law depositary regime, Part II UCIs must make clear in their offering documents that the marketing of their shares/units is only allowed to professional investors to the exclusion of retail investors in Luxembourg Luxembourg will most likely be at the forefront of this transposition. sub-depositary. For many financial groups here in Luxembourg, For those AIFs which are under the threshold of 100 Mio EUR, which is the amount of AuM allowing to be exempted from most requirements of th Also, each manager of an EuVECA labelled fund will in fact qualify on the one hand as a sub-threshold (registered) AIFM and on the other as a registered EuVECA manager. What this means is that when the assets under management exceed the EUR 500 million threshold, the EuVECA manager and the EuVECA funds it manages will have to comply with the higher standards of the AIFM Directive, applicable.
If any of the information provided in the notification changes, the AIFM should give notice of the changes to its regulator. Sub-Threshold AIFMs. If a sub-threshold EU AIFM wishes to avail of the passport, it may opt in to the full scope of the AIFMD; it would then need to comply with the AIFMD in full. Private Placement Regimes The AIFMD permits individual Member States to allow the. If a sub-threshold AIFM has not opted in to the AIFMD, it may not be regarded as an EU AIFM under the Estonian Investments Fund Act (the IFA). The IFA does not have any specific regulation that would apply to the marketing of a closed ended AIF to professional investors by a sub-threshold AIFM
In Luxembourg, an Alternative Investment Fund (AIF) within the meaning of the law of 12 July 2013 relating to managers of alternative investment funds (the AIFM Law and an AIFM), will usually take the form of: (i) a fund authorised under Part II of the Luxembourg law of 17 December 2010 on undertakings for collective investment, as amended (Part II Fund and 2010 Law. (that exclusion also applies where one sub-fund invests in another sub-fund managed by the same AIFM). If the AIFM is managing UCITS funds, the AUM of these funds are excluded. The total AUM calculation must be carried out at least annually using the latest available values (i.e. the latest available value produced during th
If the Assets under Management are below the threshold of EUR 500 million (without leverage) or EUR 100 million (if leveraged) the General Partner or the Board of Directors can act as sub-threshold or de minimis AIFM. SIF and SICAR can only be subscribed to by well-informed investors, as described in the SIF and SICAR laws AIF with AUM above the threshold. Otherwise it can appoint a Luxembourg depositary who meets the requirements under the applicable product law. 13 A Luxembourg depositary under article 19 of the AIFM Law is required if man-aged by an external AIFM with AUM above threshold or if it is an internally managed AIF wtih AUM above the threshold
The registration and qualification under the CSSF of RKS Management as a sub-threshold alternative investment fund manager within the meaning of the AIFM Directive implies that RKS Management is only subject to the reporting requirements set forth in Article 3(3) of the AIFM Directive and does not benefit from the rights and passports available under the AIFM Directive We have extensive expertise in the set up and management of funds in various EU jurisdictions, including Luxembourg and Cyprus. We know from experience the main dangers and pitfalls that can make the difference between success and failure of a fund, particularly in the setup process, where a number of apparently trivial wrong choices can have major, long-term adverse consequences Sub-threshold EU AIFMs. Broadly, a sub-threshold EU AIFM is a fund manager established in the EU and which has total funds under management of either less than EUR500 million (assuming all the funds managed are unleveraged); or less than EUR100 million funds under management (if any of the funds managed are leveraged)
Sub-threshold AIFMs. Sub-threshold AIFMs must notify us before you start to manage a new AIF or sub-fund in accordance with the requirements set out in SUP 15.3.29R. Please notify us through Gabriel if you stop managing any AIF or sub-fund or wish to notify us of a material change to any AIF details. Transfer management of a fun implementation of the Directive in Luxembourg (Section 7).. 1 TIMING The Directive has been applicable since 22 July 2013. The scope of application of the AIFMD obligations is not the same for all AIFM: • EU AIFM starting their activities on or after 22 July 2013 must apply for authorisation as from that date AIFMs which are exempted from the AIFM Law can also opt in (also referred to as sub-threshold AIFMs) and can be registered with CySEC. New Regime Moreover, a lighter touch regime for sub-threshold AIFMs (referred to as Small AIFMs or Mini Managers) has been introduced this year in Cyprus with the Small Alternative Investment Fund Manager Law L.81(I)/2020 (the Small AIFM Law) On 18 December 2020, the Commission de Surveillance du Secteur Financier (CSSF) published a new FAQ in relation to the use by Luxembourg-domiciled UCITS of the following Securities.. Opting-in under-threshold funds to AIFMD. Establishing a new fund. Setting up an EU-based fund that mirrors an offshore fund. Establishing EU segregated sub-fund on the KMG platform in Luxembourg, Cyprus or Malta
Regulatory Reporting • Distinguish btw. sub- threshold / fully regulated AIFM and non-EU AIFM • Legal basis: Art. 3(3)(d), Art. 24, Art. 42 AIFMD and Art. 110 and Annex IV of Level II Regulation • Sub-threshold: reduced reporting obligations with regard to content and frequency o annually o main instruments, markets, exposure and concentration of AIF portfoli sector (the 1993 Law) may not request the status of authorised AIFM under chapter II of the 2013 Law, this restriction does not prevent such supervised entities from registering as a sub-threshold AIFM under article 3(3) of the 2013 Law. 2. Professional depositaries of assets other than financial instrument
MAOR SARL, The sole managing general partner (Associe Gerat Commandite) of MAOR 1 SCSP is a registered sub-threshold alternative investment fund manager (Gestionnaire De Fonds D'investissement Alternatif) (AIFM), having its registered office located at 9, Rue De Bitbourg, L-1273 Luxembourg, Grand Duchy Of Luxembourg With very limited exceptions, RAIFs must appoint as manager an external AIFM that is fully authorised under the AIFMD, in Luxembourg or another EU member state, and does not seek exemption from full regulation under the directive's sub-threshold registration regime, applicable to managers of fund assets of less than €100m or of €500m in the case of non-leveraged funds with a lock-up. There is no longer any proposal to impose new AIFMD type requirements on sub threshold managers of NURS and QIS authorised funds as part of the implementation of the Directive in the UK. Also, for sub threshold internally managed investment companies, the Government proposes only to apply the de minimis registration regime permitted by the Directive In the context of the upcoming AIFMD review and a consultation process expected to be launched during the last quarter of this year, the European Securities and Markets Authority (ESMA) has issued a letter to the European Commission (EC) on 18 August 2020, highlighting some areas of the current framework where improvements could be made For an AIF managed by a sub-threshold Non-UK AIFM, it is GBP 125. Conditions for Non-EEA AIFMs (Regulation 59) A Non-UK AIFM notifying the FCA of its intention to market any AIF [(whether UK, EEA or Non-EEA)] in the UK under the local private placement regime must confirm the following conditions are satisfied
The SLP is tax transparent to Luxembourg income tax and net wealth tax. Appointment of regulated AIFM is not mandatory If the SLP is a sub-threshold fund (below EUR 100 Million), the SLP does not need to appoint an authorized AIFM On 23 August 2018, Luxembourg's regulator, the CSSF, published a Circular 18/698 which set out to codify the organisation, substance and authorisation of Luxembourg investment fund managers. Amongst others the Circular replaces Circular 12/546, which detailed the CSSF's expectations for UCITS managers and also served as the benchmark for AIFMs under the AIFM Directive The AIFM might be the Manager of the Unit Trust itself or alternatively the AIF's administrator may operate an umbrella or host AIFM entity which could act as AIFM for several Trusts. We look to the UK and Luxembourg for ideas Such an umbrella AIFM may drag otherwise sub-threshold Unit Trusts into needing a depositary. ABBL AND ALFI GUIDELINES AND RECOMMENDATIONS FOR DEPOSITARIES - Oversight Duties and Cash Monitoring for AIFs & UCITS Page 6 resources to perform the assigned oversight and cash monitoring tasks. To comply with its oversight obligations, the depositar An AIFM with assets of less than €100 million can operate as a registered AIFM. Such entities are subject to only limited obligations under AIFMD. AIFMs with assets in excess of €100 million (€500 million where the AIFM does not use leverage and has a five year lock-in period for investors) are authorised under AIFMD and must comply with all requirements of AIFMD
The AIFM remains at all times fully responsible for the proper performance of the delegated tasks and their compliance with Directive 2011/61/EU and its implementing measures. The AIFM should therefore ensure that the delegate performs and applies the quality standards which would be applied by the AIFM itself Where an AIFM manages one or more AIFs which acquire control over a non-listed company or an issuer, the AIFM should, for a period of 24 months following the acquisition of control of the company by the AIFs, first, not be allowed to facilitate, support or instruct any distribution, capital reduction, share redemption and/or acquisition of own shares by the company in accordance with this. any Guernsey, Jersey or Cayman AIFM is a Non-EU AIFM. This section of the briefing note provides a reminder of the means by which the AIFMD permits Non-EU AIFMs (whether managing an EU- or Non-EU AIF), and EU AIFMs managing Non-EU AIFs, to market those AIFs in the EU, and the additional operational burden imposed by the AIFMD of them doing so6
A Danish sub-threshold AIFM is required to register with the Danish FSA using a registration form available via the Danish FSA's website. When registering, the sub-threshold AIFM is required to state its name and company registration number, identify the AIFs that it manages and describe the investment strategies of these AIFs The table below summarises a number of requirements depending on the category of AIFM and its assets. AIFM type Assets under management AIFM report (article 3(3)d, 24.1) AIF report Fund investments, exposures and concentrations (article 24.1) AIF report Instruments traded, turnover, risk profile (article 24.2) AIF report Borrowing (Article 24.4 Also, each manager of an EuVECA labelled fund will in fact qualify on the one hand as a sub-threshold (registered) AIFM and on the other as a registered EuVECA manager. What this means is that when the assets under management exceed the €500 million threshold, the EuVECA manager and the EuVECA funds it manages will have to comply with the higher standards of the AIFM Directive, applicable to.