07 September 2021


Covering July and August 2021



The Directive and Regulation on cross-border distribution of collective investment funds were published on 12 July 2019 in the Official Journal of the EU. The new regime entered into force at the beginning of August and introduces a harmonised concept of pre-marketing whilst aiming to improve cost efficiencies and transparency of distribution across EU member states.

Luxembourg Market Update:

Net assets in Luxembourg funds rose 1% in July to a new record of €5,54trn, a 20% increase over the previous 12 months, the CSSF reports. The European fund industry as a whole continues to expand, with the total net assets of UCITS and AIFs increasing by 2.2% in June to €20.48trn, according to EFAMA.

Regulatory Developments in and beyond Luxembourg:

21 June 2021: CSSF FAQ on AML Market Entry Form

The CSSF has published an FAQ regarding the AML/CFT Market Entry Form (Funds and IFMs), which refers to a list of questions/answers in relation to the completion of this form in eDesk.

5 July 2021: Circular CSSF 21/775 – FATF statements

The CSSF has published a Circular to inform the industry of decisions taken by the FATF with respect to high-risk jurisdictions on which enhanced due diligence and, where appropriate, counter-measures are imposed and jurisdictions under increased monitoring of the FATF.

12 July 2021: Circular CSSF 21/777 - Outsourcing to cloud service providers

The purpose of the Circular is to implement the ESMA Guidelines on outsourcing to cloud service providers.

28 July 2021: Communication related to the publication of the Law of 21 July 2021 transposing Directive (EU) 2019/1160 on cross-border distribution

Circular CSSF 11/509 has been updated to include amendments to the Law of 21 July 2021 transposing Directive (EU) 2019/1160 on cross-border distribution of collective investment undertakings (“CBDF Directive”): Circular CSSF 21/778.

In addition, a list of questions/answers (FAQ) is available on the CSSF website highlighting the changes for notifications to the CSSF in the context of the CBDF regulation.

Regarding the pre-marketing notifications of AIFMs, a new dedicated web page is also available.

29 July 2021: Communication related to a CSSF thematic review on AML/CFT controls applied to unregulated AIFs by the IFM

The thematic review conducted in June and July 2021 had the following key findings:

  • Weaknesses in the risk assessment at IFMs and unregulated AIFs;
  • Weaknesses in the oversight of the delegated portfolio managers;
  • Weaknesses with regard to the risk-based approach on investments;
  • Weaknesses of name screening on Targeted Financial Sanctions on investments.

29 July 2021: Communication related to a CSSF thematic review on compliance with the Benchmark Regulation

In 2020, the CSSF’s “UCI on-site inspection department” carried out a thematic review in relation to Regulation (EU) 2016/1011 of 8 June 2016 (“Benchmark Regulation” or “BMR”). The BMR was published in the European Official Journal on 29 June 2016 and has applied since 1 January 2018. It defines a common framework to ensure the accuracy and integrity of the indices used as benchmarks in financial instruments and financial contracts, or to measure the performance of investment funds in the EU.

While the BMR targets three types of market participants (benchmark administrators, contributors, and users), the thematic review focused on the obligations of Luxembourg IFMs as benchmark users. The thematic review took place from July to November 2020 and included six authorised Luxembourg IFMs.

Overall, the CSSF observed a low level of BMR compliance among the inspected entities. This was most prominent in the required prospectus disclosures of UCITS funds in relation to the ESMA Register, which were found to be often missing, incorrect or incomplete.

30 July 2021: ESMA Guidelines on certain aspects of the MiFID II compliance function requirements

The CSSF has published Circular CSSF 21/799. The purpose of the circular is to inform the public that the CSSF, in its capacity as competent authority as defined under Article 1(2) of the Law of 5 April 1993 on the financial sector, as amended, applies the Guidelines of ESMA on certain aspects of the MiFID II compliance function requirements (Ref. ESMA35-36-1952). 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.

30 July 2021: CSSF communication on changes intended to optimise the authorisation processes of new UCI and new sub-funds added to existing fund structures

  • The CSSF informed the industry of procedural changes intended to optimise the authorisation process of new UCI and/or new sub-funds added to existing fund structures.
  • A new questionnaire named “Fund Pre-Inception Readiness Review” is introduced and will need to be submitted with the application file. This single document will replace a series of confirmations currently requested separately. The questionnaire intends to provide a confirmation by the Management Company/AIFM that all preparatory work and assessments required by regulation have been completed and that the Management Company/AIFM is ready to onboard the new fund or sub-fund(s) after authorisation.
  • The CSSF will no longer request nor assess all agreements concluded between a fund and its service providers during the examination of an application file. At the end of the examination, the applicant will submit to the CSSF a copy of final signed agreements deemed “core,” along with a standardised letter confirming compliance of these agreements with applicable legal and regulatory requirements. The CSSF informs applicants on general guidance that is expected to be considered as good practice when drafting fund service contracts.
  • For the sake of clarifying what is expected in terms of documents required to support an application, two additional new guiding notes have been added on the CSSF website in order, on the one hand, to give general considerations to be followed when submitting documents; and on the other, to provide an overview table of all the documents required when submitting a UCI approval file.

The changes are applicable from 16 August 2021.

2 August 2021: Sustainable finance: Publication of the UCITS / AIFMD / MiFID Delegated Acts in the EU Official Journal

The following Delegated Acts were published in the Official Journal of the European Union:

  • Commission Delegated Directive (EU) 2021/1270 of 21 April 2021 amending Directive 2010/43/EU as regards the sustainability risks and sustainability factors to be taken into account for Undertakings for Collective Investment in Transferable Securities (UCITS) (effective date: 1 August 2022);
  • Commission Delegated Regulation (EU) 2021/1255 of 21 April 2021 amending Delegated Regulation (EU) No 231/2013 as regards the sustainability risks and sustainability factors to be taken into account by Alternative Investment Fund Managers (effective date: 2 August 2022);
  • Commission Delegated Regulation (EU) 2021/1253 of 21 April 2021 amending Delegated Regulation (EU) 2017/565 as regards the integration of sustainability factors, risks and preferences into certain organisational requirements and operating conditions for investment firms (effective date: 1 August 2022);
  • Commission Delegated Directive (EU) 2021/1269 of 21 April 2021 amending Delegated Directive (EU) 2017/593 as regards the integration of sustainability factors into the product governance obligations (effective date: 22 November 2022).

A link to the publications in the EU Official Journal can be found here.

2 August 2021: ESMA guidelines on marketing communications

ESMA has published the final version of its guidelines on marketing communications under the regulation on cross-border distribution of collective investment undertakings. The guidelines should apply to all marketing communications addressed to investors or potential investors for UCITS and AIFs. The effective date will be six months after the date of the publication of the guidelines on ESMA’s website in all EU official languages, i.e. from 2 February 2022.

30 August 2021: CSSF issues Communiqué regarding operational working arrangements in the context of Covid-19

The CSSF has published a Communiqué with an update on operational working arrangements in the context of Covid-19.

The CSSF states that:

The coronavirus is still active and it is important that the entities under the supervision of the CSSF, as everyone else, help prevent the spread of the virus, while ensuring their business continuity.

It is up to the supervised entities to define their operational working arrangements: on-site or remote. As regards on-site employees, their safety needs to be guaranteed, notably by observing protective measures.

Circular CSSF 21/769 on telework, which was due to enter into force on 30 September 2021, will only apply as from the end of the pandemic, in accordance with Article 66 of the circular. No new date has been published.

31 August 2021: CSSF issues Communiqué regarding the application date of ESMA’s guidelines on Art. 25 AIFMD on systemic risk

On  17 December 2020, ESMA issued a publication on guidelines on art. 25 AIFMD to address systemic leverage risk in the AIF sector.

On 31 August 2021, the CSSF issued a Communiqué to inform that after the translations of these guidelines were published by ESMA on 23 June 2021, the guidelines are applicable as of 23 August 2021.

2 September 2021: Entry into force of IFR/IFD:

Capital requirements regulation (CRR) and directive (CRD), which are the European iterations of the Basel committee recommendations (Basel III) mainly concern large credit institutions and Banks but do not impact all investment firms with the same magnitude;, some are even exempted.

With IFR/IFD (Investment Firms Regulation EU 2019/2033 and Investment Firms Directive EU 2019/2034) the European Commission and the Council wish to widen the scope of institutions impacted by Basel related prudential rules, by including all MIFID investment firms. This means that, while Banks and Insurers will mainly remain under CCR / CRD framework, other investment firms like asset managers or advisors will fall under the newly adopted IFR / IFD framework. Some exemptions are still maintained by the regulator as regards small and not interconnected institutions.

Investment Funds Managers regulated under AIFMD and UCITS Directive are only marginally impacted by IFR / IFD. According to article 60 and 61 of the IFD, the own funds of a management company (regulated under AIFMD or UCITS Directive) must at no time be less than one quarter of the fixed overheads of the preceding year. But AIFMD and UCITS Directive remain the primary reference in all common topics like remuneration, reporting or disclosures. However, it is still not clear what will be the obligations of the Firms falling under both AIFMD / UCITS Directive and MIFID).


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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