LUXEMBOURG Law and Practice Contributed by: Anna Gassner, Philipp Mössner, Andrea Carraretto and Etienne Weryha, GSK Stockmann SA
tion on the legal interpretation and implementation of the technical screening criteria. The Main ESG Regulations in Luxembourg The ESG regulatory framework in Luxembourg is dominated by directly applicable as well as trans - posed European legislation. The main references in Luxembourg are the SFDR, the SFDR Regulatory Technical Standards (SFDR RTS) and Regulation (EU) 2020/852 (the “Taxonomy Regulation”). This is in addi - tion to specific guidelines provided by the CSSF. The CSSF’s current priorities with regard to ESG are essentially focused on: • the integration of sustainability risks by investment fund managers (AIFMs, management companies and external portfolio managers); • compliance with existing ESG-related require - ments; and • the consistency of pre-contractual information in offering documents and on websites or as market - ing material. Regarding the consideration of sustainability risks, the CSSF emphasises that the delegation of port - folio management functions has no influence on the investment fund manager’s obligations to disclose the consideration of sustainability risks. This includes the obligation to implement an adequate risk manage - ment framework. The CSSF will increasingly focus on verifying compli - ance, in particular with the ongoing disclosure obliga - tions under Article 11 of the SFDR in connection with Articles 50 and 58 of the SFDR RTS. Particular attention is also paid to the increased con - trol of the consistency of ESG-related disclosures made in pre-contractual documents (in particular offering documents with SFDR RTS annexes), web - sites and marketing materials. On 19 November 2024, the Council of the European Union formally adopted the new ESG Ratings Regu - lation, following a proposal from the European Com - mission on 13 June 2023 and an agreement with the European Parliament at first reading. This Regula -
tion marks a significant step in the European Union’s efforts to regulate ESG rating activities, addressing long-standing concerns over inconsistencies, lack of transparency, and fragmented practices across mem - ber states. This Regulation reflects the EU’s continuing commitment to fostering sustainable finance markets, in pursuit of the EU’s Green Deal objectives. It will be published in the EU’s Official Journal and will enter into force 20 days after publication, with its provisions becoming applicable 18 months later, on 2 July 2026. Gender Parity on the Boards of Listed Companies The transposition into Luxembourg law of the Euro - pean Directive (EU) 2022/2381, known as the “Women on Board” directive should have taken place before 28 December 2024. However, the transposition is slightly behind schedule as Project 8519 of the parliament is still under commission. There is no precise date for the law to be voted on and the Directive transposed but Luxembourg politicians are confident that it will proceed. 9. Exit Strategies and Termination 9.1 Termination of a JV JV arrangements can come to an end in several ways, which should be outlined in the JV agreement. The most common include: • a deadlock situation that has not been resolved; • at the expiry of a determined period, unless agreed otherwise between the participants to the JV; • upon termination of the object of the JV – some JVs are only set up for the completion of a spe - cific purpose and once completed, the JV may be terminated; • by mutual decision of the participants to the JV; • by any participant to the JV on contractual grounds thoroughly defined in the JV agreement – eg, breaches of certain provisions of the JV agreement, insolvency of a participant, change of control, violation of an IP licence agreement, failure to meet a funding obligation following an unsuccessful cure period; or • poor performance of the JV.
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