07/24/2024 | Press release | Distributed by Public on 07/24/2024 08:22
The CSSF has recently observed that, for a certain number of AIFs investing in illiquid assets, diverging approaches amongst Luxembourg depositaries, as regards the controls implemented for properly executing their safekeeping duties of ownership verification and record keeping obligations, are being applied. While some depositaries tend to collect a certain number of information and transaction documents prior to investments being made in illiquid assets, others solely rely on ex-post checks.
The CSSF hereby reminds all Luxembourg depositaries that checks and controls must be carried out prior to the acquisition of illiquid assets (i.e. ex-ante). This is to ensure full compliance with the requirements applicable in the context of both (i) their safekeeping duties regarding ownership verification and record keeping, in particular those set forth under Article 90 of Commission Delegated Regulation (EU) No 231/2013, as amended ("AIFMR"), but also (ii) their duties regarding the timely settlement of transactions, in particular those set forth under Article 96 of the AIFMR.
More specifically, the CSSF expects that controls in connection with transactions involving the acquisition of illiquid assets would typically be implemented as follows:
In light of Article 90(1) of the AIFMR, Luxembourg authorised AIFMs are correspondingly required to provide in a timely manner the depositary of the AIFs they manage with all relevant information necessary for the depositary to comply with its safekeeping duties regarding ownership verification and record keeping (as further specified under Article 90(2) of the AIFMR). For the avoidance of doubt, this includes the aforementioned ex-ante controls.