LUXEMBOURG Trends and Developments Contributed by: Arnaud Arrecgros, Yann Hilpert, David De Pasquale, Beatriz Garcia and Antoine Becker, Maples and Calder
Transposition of MiFID III, the Listing Directive and the ESAP Directive in Luxembourg: The Impact in the Context of Fund Financing On 3 July 2025, the Luxembourg Parliament adopted a law transposing three major EU legislative instru- ments: Directive (EU) 2024/790 on markets in finan- cial instruments (MiFID III), Regulation (EU) 2024/791 amending MiFIR, Directive (EU) 2024/2811 on the list- ing of securities (the “Listing Directive”), and Direc- tive (EU) 2023/2864 establishing the European Single Access Point (the “ESAP Directive”). The law, pub- lished on 8 July 2025, entered into force partly from 10 July 2025. It amends the Financial Sector Law of 1993, the MiFID Law of 2018 and the Transparency Law of 2008. This reform package constitutes a significant develop- ment in the regulation of EU capital markets, focusing on investor protection, market efficiency and access to information. For the Luxembourg fund finance market, however, the immediate consequences are limited. Borrowing powers, leverage restrictions, and the structuring of collateral under the Collateral Law remain unchanged. However, the broader market con- text for funds and their financing counterparties will inevitably be influenced by these reforms. MiFID III and the MiFIR review seek to consolidate market transparency and investor safeguards. The key measures include: • introduction of a consolidated data tape publishing transaction data across EU trading venues; • a general ban on payment for order flow, subject to narrow exemptions; • recalibrated position limits and reporting regimes for commodity derivatives; and • adjustments to transparency obligations for systematic internalisers and multilateral trading facilities. While primarily directed at investment firms and trad- ing venues, these changes will also indirectly affect fund managers operating in commodity or derivative markets. Notable features MiFID III / MiFIR
Listing Directive The Listing Directive simplifies the framework for admission of securities to trading and eases pro- spectus obligations, particularly for SMEs and growth market issuers. It also reinforces transparency around the cost of investment research, requiring annual dis- closure to clients. For Luxembourg, this is expected to make listing more accessible for mid-sized issu- ers, including listed fund vehicles, while unlisted funds remain outside its scope. ESAP Directive The ESAP Directive introduces a centralised European Single Access Point for regulated disclosures. Lux- embourg amended its Transparency Law to align with this requirement by adding a new Article 20-1. Listed issuers must now ensure that regulated information is filed for publication via ESAP. Private funds struc- tured as partnerships are not in scope, unless they are themselves listed. Impact on fund financing, borrowing and security arrangements Borrowing and leverage The new framework does not amend the existing framework governing borrowing or leverage. Fund documentation and existing legal limits continue to apply. Collateral and guarantees Luxembourg’s Collateral Law of 2005 remains untouched. Security packages in fund finance trans- actions, typically consisting of pledges over uncalled capital, bank accounts, shares or receivables, contin- ue to benefit from their recognised insolvency-remote character. Transparency obligations ESAP will have limited reach in the private funds sec- tor. Unless a fund is listed, its borrowing and security positions are not subject to additional public disclo- sure. The reporting obligations relevant to fund finance remain those under AIFMD and contractual undertak-
ings to lenders. Market outlook
The July 2025 reforms, while not altering the funda- mentals of Luxembourg fund finance, are part of a
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