Transposition AIFMD 2 – Bill of law sent to the Luxembourg Parliament

This Luxembourg bill of law aims at modifying UCI law as of 17 December 2010 as well as the alternative investment fund manager law as of 12 July 2013. 

The legal text submitted to the Luxembourg Parliament reflects the provisions of AIFMD 2 without bringing new measures or additional rules that could be perceived as ‘’gold plating’’. 

This bill of law now submitted to the Parliament, must follow the usual legal and parliamentary process and could be subject to some amendments. Once this bill of law adopted, the amended law should enter into force on 16th April 2026. 

However, the Reporting obligations introduced by this Directive will apply as from 16th April 2027. 

Principal novelties brought by AIFMD 2 

As a reminder, some major changes have been made with AIFMD 2 with mainly two novelties for the Alternative Investment Funds (AIFs): The LOF, Loan Origination Fund for granting loans and the obligation to select two liquidity management tools (LMT) -among the 9 applicable only when the AIF is an open-ended fund. 

The introduction of a LOF permits alternative investment funds to lend cash to companies. Loans of the AIF must represent more than 50% of its net asset value to get this statute of LOF, a complementary alternative to traditional banking financing. 

Luxembourg Specificities 

The Luxembourg AIF would be prohibited to offer consumer loans to Luxembourg consumers and loans on the national territory, a safe measure of public interest. 

AIFMD 2 set up common rules for granting loans, covering: Management of conflicts fof interest, control of credit risk and risk spreading depending on the type of Fund (open ended / closed ended to redemption of shares/units). The AIF discloses in its prospectus its investment strategy in terms of non-banking loans it offers with the approval of the National Competent Authority (NCA). 

Those LMT offer to asset managers more flexibility to monitor huge amounts of subscriptions/redemptions in case of strong financial market turbulence. 

While AIFMD 2 offers under certain conditions the possibility for EU Member States to allow an AIF to appoint a depositary located in another Member State, Luxembourg prohibits this possibility. But the bill of law confirms that depositaries established in Luxembourg could serve an AIF, domiciled in another EU country that would have granted this cross border flexibility under certain conditions. 

In Luxembourg, the biggest domicile of investment funds within the EU with nearly € 6 trillion, AIFs can be created under the contract or corporate form and organized under the Luxembourg laws - SIF law as of 13 July 20007, SICAR law as of 15 June 204, RAIF Law as of 23 July 2016 or UCI part II of UCI law as 17 December 2010. AIFs include various structures regulated or not, adapted to private debt funds with the possible legal structures as follows: Investment Company with Risk Capital (SICAR), Specialised Investment Fund (FIS) and Reserved Alternative Investment Fund (RAIF). 

AIFMD is a ‘’manager ‘’Directive i.e. a licence is granted to the manager to create / administer alternative funds within the EU. 

No RTS - Regulatory Technical Standards – on open-ended Loan Originating Funds (LOF) before October 2027 

To conclude, and in parallel the European Commission published beginning of October 2025, the list of level 2 measures (RTS and ITS) that are not a priority for CSDR, MIF, EMIR, SFDR, AIFMD, multiple voting rights… The RTS on “open-ended Loan Originating Funds” are also not a priority. 

In consultation with the co-legislators of the EU, the European Commission advised the NCA and the Anti-Money Laundering Authority (AMLA) that non-essential deeds would not be adopted before 1st October 2027. 

RTS disclosing new Reporting obligations are expected early 2026. 

Jean-Pierre Gomez, Head of Regulatory & Public Affairs, SGSS Luxembourg