LUXEMBOURG Law and Practice Contributed by: Evelyn Maher, Gaston Aguirre Draghi and Djelloul Mansour, BSP
In the case of a dispute with a retail fund, a retail investor can contact the CSSF in order for the CSSF to impartially intervene for an out-of-court resolution, but its out-of-court decision is not binding on the parties. Finally, NAV calculation errors and investment breaches are highly monitored by auditors and the CSSF, and incoming and redeeming inves - tors are to be compensated in the case of nega - tive consequences of such errors. CSSF Circular 24/856 sets out the rules to be followed in this regard from 1 January 2025. 3.3.11 Approach of the Regulator The CSSF takes a practical approach. New Lux - embourg market participants can have a face- to-face meeting with CSSF officials to present their projects, better understand the CSSF’s expectations and ask questions. Formalities and filings with the CSSF are mainly done through an online platform, though dur - ing an authorisation process, the CSSF can be Please refer to 3.1.4 Disclosure Requirements and 3.3.1 Regulatory Regime regarding invest - ment restrictions on retail funds. Retail funds must appoint a custodian bank act - ing in the interests of investors and providing services as required by the UCI Law – ie, safe - keeping of assets, cash monitoring and monitor - ing of retail funds’ compliance with the legal and regulatory framework. Custodian banks must be credit institutions established in Luxembourg and have a specific licence granted by the CSSF in order to carry out this business. contacted via telephone and email. 3.4 Operational Requirements Retail Funds
Retail funds admitted to trading on the Luxem - bourg Stock Exchange are subject to the Law of 11 January 2008 on transparency require - ments (implementing Directive 2004/109/EC of 15 December 2004 on the harmonisation of transparency requirements in relation to informa - tion about issuers whose securities are admitted to trading on a regulated market and amend - ing Directive 2001/34/EC), and to the Law of 23 December 2016 on market abuse (stemming from Regulation (EU) No 596/2014 of 16 April 2014 on market abuse). Retail funds must have an AML policy and com - ply with the AML Law with respect to their busi - ness relationships (including their investors). In addition, each retail fund has to have in place policies to deal with NAV calculation errors, investment breaches and other errors as referred to in 3.3.10 Investor Protection Rules . UCITS Funds Asset valuation of a UCITS fund must be done in accordance with the UCI Law, which pro - vides that listed securities should be valued at the last known stock exchange quotation unless not representative. Non-listed securities or listed securities for which the market price is not rep - resentative should be valued on the basis of the probable realisation value. Management companies must have policies in place to prevent insider dealing and the mis - use of confidential information by one of their employees or service providers. Uncovered short positions are not allowed, but a UCITS fund can pursue a long-short invest - ment strategy and achieve short exposure syn - thetically through the use of financial derivative instruments.
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