22 June 2021



The European Fund and Asset Management Association (EFAMA) and the Luxembourg Fund Association (ALFI) have called for a delay and transition period for ESG-related regulations. EFAMA has called on regulators to delay full implementation of the EU's Sustainable Finance Disclosure Regulation (SFDR), saying the current deadline of January 2022 does not allow sufficient time to comply amid incomplete data availability and cost concerns. ALFI has called for the EU's taxonomy legislation to allow investment companies to delay disclosing whether their products meet the regulation's sustainability criteria saying that fund managers will need extra time to gather data in order to determine how their portfolios will be classified.


Luxembourg Market Update:

Net assets of UCITS and AIFs increased by 4.5% in the first quarter of 2021, reaching €19.6trn, according to the Investment Fund Industry Fact Sheet published by the European Fund and Asset Management Association. UCITS net assets increased by 5.6%, driven by stock market gains and net sales, while the net assets of AIFs grew by 2.6%. UCITS and AIFs attracted €201bn of net inflows in the first quarter. Net sales of UCITS amounted to €169bn, compared with €226bn in the final three months of 2020, while AIFs attracted €32bn in net new money over the quarter, up from €64bn in the previous quarter.


Regulatory Developments in and beyond Luxembourg:

13 April 2021:

CSSF issues Circular 21/770 on SFDR reporting

The CSSF has issued CSSF Circular 21/770 on amended ESMA guidelines (ESMA-70- 151-2838) on reporting under Articles 4 and 12 of the Sustainable Finance Reporting Directive (SFDR). By way of this circular, the CSSF informs all entities subject to its supervision and all non-financial counterparties to securities financing transactions as defined in Article 3 of SFTR that it has integrated the amended version of the ESMA guidelines into its administrative practices and regulatory approach. The revised ESMA guidelines were published on 29 March 2021. The circular entered into force on 13 April 2021.


20 April 2021:

CSSF issues Circular CSSF 21/771 on prospectus disclosures

The purpose of the circular is to inform the persons concerned that the CSSF applies the Guidelines of ESMA on disclosure requirements under the Prospectus Regulation (ESMA32-382-1138), published on 4 March 2021. Consequently, the CSSF has integrated the Guidelines into its administrative practices and regulatory approach with a view to promote supervisory convergence in this field at European level.


27 May 2021:

ESMA guidelines on marketing communications

ESMA has published the final report on its guidelines on marketing communications under the Regulation on cross-border distribution of funds. The guidelines will be translated into the official languages of the EU and published on ESMA’s website. The publication of the translations will trigger a two-month period during which national competent authorities must notify ESMA whether they comply or intend to comply with the guidelines. The guidelines will apply 6 months after the date of the publication of the translations.

28 May 2021:

New ESMA Q&As concerning performance fees

ESMA published updated versions of its Q&A document on the AIFMD and on UCITS to include the following new questions concerning performance fees:

  • Are registered AIFMs referred to in Article 3(2) of the AIFMD subject to ESMA’s Guidelines on performance fees while marketing to retail investors units or shares of AIFs they manage?
  • Based on paragraph 40 of the Guidelines on performance fees, how should the performance reference period for the benchmark model be set?
  • How should the performance reference period be set in case of a merger where the receiving AIF is a newly established fund with no performance history and it is in effect a continuation of the merging AIF?


1 June 2021:

UK extends PRIIPs disclosure exemption for UCITS funds until 2026

The UK treasury has extended the exemption of UCITS funds from the Packaged Retail Investment and Insurance-based Products Regulation until 2026, in contrast to the EU authorities, who have said the exemption will expire at the end of June next year. UCITS funds sold in the UK will have to provide the key information document prescribed under the UCITS regime rather than the PRIIPs version. While changes may be enacted before the end of 2026, the extension is intended to provide certainty to UCITS managers on disclosure requirements after this year.


2 June 2021:

ALFI calls for disclosure delay under EU taxonomy legislation

Luxembourg fund industry group ALFI has called for the EU's taxonomy legislation to allow investment companies to delay disclosing whether their products meet the regulation's sustainability criteria until after they have indicated their commitment to alignment with the taxonomy. Under the current draft of the legislation, companies are required to make both disclosures at the same time, but ALFI says fund managers will need extra time to gather data in order to determine how their portfolios will be classified. In its feedback on the draft delegated act on the taxonomy's Article 8,  the organisation also expresses concern that the EU proposals will prevent financial product providers using voluntary reporting of taxonomy alignment by companies not currently required to do so under the Non-Financial Reporting Directive, saying this exclusion would favour larger listed companies over smaller ones.


4 June 2021:

Updated Standard Contractual Clauses for data transfers to third countries

The European Commission has published its updated versions of Standard Contractual Clauses (SCCs) which can be used by data controllers in the EEA that have service providers (data processors) in non-EEA countries to ensure an appropriate level of data protection in line with the EU General Data Protection Regulation (GDPR). With regard to the UK, it remains to be seen whether the EU will adopt the adequacy decisions which were launched in February this year. Pursuant to the trade and cooperation agreement between the UK and the European Commission, the GDPR will only remain applicable until end of June 2021. After this period, appropriate safeguards will be needed in order to transfer personal data from the EEA to the UK, unless the draft adequacy decisions are approved.


10 June 2021:

Publication of the CSSF FAQ providing clarifications on the application of MiFID to Luxembourg Investment Fund Managers

CSSF published an FAQ on the application of MiFID to Luxembourg IFMs. This CSSF FAQ aims at clarifying under what circumstances and to what extent MiFID applies to IFMs, their third-party delegates and their investment advisers.

IFMs will need to analyse their organisation model in order to assess (i) the need for an authorisation to provide services under Article 101 (3) of the Law of 17 December 2010 or under Article 5 (4) of the Law of 12 July 2013; (ii) appropriate compliance, including delegates, with the third country regime as foreseen under Circular CSSF 19/716 as amended by Circular CSSF 20/743 on the provision in Luxembourg of investment services or performance of investment activities and ancillary services in accordance with Article 32-1 of the Law of 5 April 1993 on the financial sector.

IFMs are expected to comply with the CSSF FAQ as soon as possible and by 31 December 2021 at the latest, considering the best interests of investors.


For further information, please contact:

Tobias Ettlin
m: +352 691 111 931

Disclaimer: This regulatory update has been prepared for clients of ONE group solutions and its subsidiaries for informational purposes and is not intended to be relied upon as professional advice. Please visit:

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