LUXEMBOURG Trends and Developments Contributed by: Claire Guilbert, Geoffroy Hermanns and Cyril Clugnac, Norton Rose Fulbright
• NCAs. There remain some uncertainties around the exact scope of application of the final guidelines, which will require further clarification by ESMA. These include: • whether the Guidelines apply to funds that are closed to further subscription by inves - tors, despite a majority of respondents to the Consultation being against it; and • whether the Guidelines apply to non-EU AIFMs and non-EU AIFs – whilst non-EU AIFs managed by EU AIFMs are likely to be in scope provided that such non-EU AIFs are marketed in the EU, the situation is less clear for non-AIFMs marketing AIFs in the EU under Article 42 of the AIFMD (which requires compliance with Article 23 of the AIFMD, including Article 23(7) of the AIFMD under which ESMA based the Guidelines). Also, in terms of scope, it is worth noting that the Guidelines do not capture all the financial prod - ucts captured by Regulation (EU) 2019/2088 of 27 November 2019 (the “Sustainable Finance Disclosure Regulation” (SFDR)), which has a much broader scope, leaving a gap between the two. As for the content of the Guidelines, funds are bracketed into three categories depending on the type of terms used in their name, with each of these categories sharing a common require - ment: 80% of the relevant fund’s investments should be used to meet environmental or social characteristics, or sustainable investment objec - tives, in accordance with the binding elements of the investment strategy disclosed in Annexes II and III of Commission Delegated Regulation (EU) 2022/1288, which supplements the SFDR. In addition, depending on the category (or com -
bination thereof) in which a relevant fund’s name falls, Climate Transition Benchmark (CTB) exclu - sions and/or Paris-Aligned Benchmark (PAB) exclusions must be applied. On 21 August 2024, ESMA published the Guide - lines on its website in all EU official languages, starting the clock as to when they apply such that: • NCAs had until 21 October 2024 to notify ESMA as to whether they (i) comply, (ii) do not comply but intend to comply, or (iii) do not comply and do not intend to comply with the Guidelines; • the Guidelines apply from 21 November 2024; and • managers of new funds are expected to com - ply with the Guidelines in respect of those funds from the date of application – manag - ers of funds existing before the date of appli - cation should comply with respect to those funds within six months from 21 May 2025. Finally, it should be kept in mind that ESMA high - lights in the Guidelines that “it should be noted that these guidelines have been designed in light of the current legislative framework. ESMA will review the guidelines, if necessary, in case of any update of the relevant legislation”. In Luxembourg, the CSSF opted for the applica - tion of the Guidelines, publishing on 21 Octo - ber 2024 the related CSSF Circular 24/863 and thereby implementing the Guidelines into the Luxembourg regulatory framework. Conclusion The fund industry is growing and evolving into a more mature industry – which is in the process of being shaped progressively by the various regu - latory initiatives mentioned above – with the end
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