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LUXEMBOURG

Luxembourg, the Luxembourg Chamber of Notaries and the Luxembourg Conseil d’Etat issued opinions on Bill 6625. The Finance and Budget Committee of the Luxembourg Parliament adopted amendments to Bill 6625 on 3 July 2014, while the Luxembourg Conseil d’Etat issued a complementary opinion on 11 July 2014. Bill 6625 was adopted by the Luxembourg Parlia- ment as the law of 28 July 2014 on the immobilisa- tion of shares and units in bearer form, which was published in the Mémorial on 14 August 2014. What’s in there? The law of 28 July 2014 (the “Law”) contains sev- eral changes to the original Bill 6625, following the recommendations made by the bodies that issued opinions on Bill 6625 as well as the amendments of the Finance and Budget Committee of the Luxem- bourg Parliament, in particular: « Deletion of the exemption regarding bearer shares admitted to trading on a regulated market, as per the amendment of the Finance and Budget Com- mittee. Such shares will therefore also fall within the scope of the Law. « Regarding the ownership and transfer of bearer shares, the Law adopts the wording of the rele- vant parliamentary amendment, as proposed by the Luxembourg Bar and endorsed by the Conseil d’Etat. The wording ensures the proper legal dis- tinction between nominative and bearer shares. « Deletion in the last sub-paragraph of Article 84 of the law of 10 August 1915 of the reference to Article 42 of the same law, in order to avoid the general application of the new Article 42 to bearer shares not falling within the scope of the Law. The change had already been adopted as a parliamen- tary amendment, following the relevant recom- mendation of the Luxembourg Bar. « Addition of a clause in Article 5, 2 b) of the law of 5 August 2005 on financial guarantee contracts, in order to cover the case of the transfer of the possession of pledged bearer shares. The change had already been the object of a parliamentary amendment, following the relevant recommenda- tion of the Luxembourg Bar and the endorsement of the Conseil d’Etat. « As regards the transitional provisions of the Law, the relevant deadlines remain unchanged, as amended by the Luxembourg Government on 28 March 2014, namely: (a) 6 months for the appoint- ment of a professional depositary; (b) 18 months for the deposition of bearer shares; (c) 6 months for the suspension of the rights attached to bearer shares; and (d) 18 months for the cancellation of bearer shares. All deadlines run as from the entry into force of the Law, despite the relevant criticism exercised by the Luxembourg Chamber of Com- merce, the Luxembourg Bar and the Conseil d’Etat.

passport under the minimum conditions of Article 45 of the AIFM law (transparency requirements and existence of cooperation arrangements); - Non-EU AIFMs must inform the CSSF prior to any marketing activity by filling out an information form available for download on the CSSF web- site; - Non-EU AIFMs must comply with the reporting requirements of Article 24 of the AIFMD only as regards AIFs marketed in Luxembourg; - Private placement in Luxembourg will be permit- ted until 22 July 2014. Non-EU AIFMs marketing AIFs in Luxembourg under the existing private placement regime will have to send the relevant information form to the CSSF if they intend to continue marketing AIFs in Luxembourg. « Question 19: Instead of listing the non-EU regu- lators with which the CSSF has signed a Memo- randum of Understanding (MoU), question 19 now makes reference to the list published on the ESMA website containing the AIFMD MoUs signed be- tween EU and non-EU supervisory authorities. What’s next? The CSSF FAQ on AIFMs is updated on a regular basis. THE TEXT OF THE UPDATED FAQ IS AVAILABLE HERE. Publication of the law of 28 July 2014 on the immobilisation of bearer shares Background Bill 6625 was introduced on 4 October 2013 follow- ing FATF’s recommendations. It seeks to amend the law of 10 August 1915 by laying down rules regard- ing the immobilisation of bearer shares. In particu- lar, it will give an end to the free transfer of bearer shares by delivery of certificate and will require (i) the immobilisation of bearer shares by a profession- al depositary and (ii) the identification of the bearer shares holder. Bill 6625 covers both shares to be issued after the entry into force of the law and bearer shares already in circulation. Amongst others, bearer shares issued or to be is- sued by investment funds (SICAV or FCP) fall within the scope of Bill 6625. Bill 6625 was amended by the Luxembourg Govern- ment on 28 March 2014. The Luxembourg Chamber of Commerce, the Conseil de l’Ordre du Barreau de

CSSF updates AIFM FAQ Background The Frequently Asked Questions (FAQ) document of the CSSF provides guidance on the implementation of the AIFMD in Luxembourg. What’s in there? The new version of the FAQ issued on 18 July 2014 contains updated versions of questions 14 and 19 (previously 17) as well as two new questions (17 and 18): « Question 14: The CSSF clarifies that non-EU AIFMs will have to report to the CSSF only where they market AIFs in Luxembourg (as long as the pass- port regime is not available). « Question 17 (new): The CSSF specifies the regu- latory texts to be taken into consideration for the purpose of assessing the initial capital and own funds requirements applicable to (1) a Chapter 15 Management Company holding an AIFM li- cense, and (2) an AIFM not holding a Chapter 15 Management Company license. Furthermore, the CSSF clarifies the risks that must be covered by an AIFM via additional own funds or a professional indemnity insurance. In master-feeder structures, professional liability risks must be covered at both master and feeder level. « Question 18 (new): The CSSF clarifies the situ- ation regarding non-EU AIFMs marketing AIFs in Luxembourg without a passport. The main points of the CSSF’s guidance are the following: - Non-EU AIFMs are allowed to market AIFs to professional investors in Luxembourg without a

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