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LU - Adoption in Luxembourg of the law creating Reserved Alternative Investment Funds

On 17 March 2016, the Law on OTC derivatives, central counterparties and trade repositories was published in the Luxembourg Official Journal.

On 14 July 2016, Luxembourg voted in the law creating a new type of fund: the Reserved Alternative Investment Fund (RAIF).

The characteristics of the RAIF are very similar to those of the SIF (Specialised Investment Fund), which notably means that it is reserved to institutional investors, professionals, and other informed investors. Furthermore, it picks up certain parts of the law on SICAR (investment companies in risk capital), which may exempt it from the rules of diversification under certain risk capital investment conditions. Unlike the SIF, the RAIF is not subject to the approval and supervision of the CSSF (Commission de Surveillance du Secteur Financier). In practice, this means that a RAIF may be launched when the various service providers, such as the alternative fund manager (AIFM) and the depository, have given their green light, on the understanding that the AIFM of course still remains subject to approval. The official text dated 23 July 2016 was published in the Mémorial on 28 July 2016 and took effect on 1 August 2016.

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