On 18 October 2022, the Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF) published a communication providing clarification regarding eligible entities for the opening of cash accounts in relation to the alternative investment funds (AIFs).

CSSF noticed that for a certain number of AIFs, notably AIFs that have appointed a professional depositary of assets other than financial instruments under Article 26-1 of the Law of 5 April 1993 on the financial sector, as amended (PDAOFI) as their single-depositary, the AIF or the depositary uses or intends to use the services of an electronic money institution or a payment institution (PI) governed by the Law of 10 November 2009 on payment services or by the Directive (EU) 2015/2366 on payment services in the internal market, for the purpose of holding the cash accounts of such AIFs.

The CSSF reminds the industry that all cash of an AIF has to be booked in cash accounts opened in the name of the relevant AIF, in the name of their Alternative Investment Fund Manager (AIFM) acting on behalf of the relevant AIF, or in the name of the depositary acting on behalf of the relevant AIF with an entity as specified under Article 19(7) of the Law of 12 July 2013 (the AIFM Law). It is also emphasised that in relation to AIFs that have appointed a PDAOFI, none of the AIF’s cash can be held directly by the PDAOFI itself.

It is noted that AIFs for which an EMI or a PI has been appointed to hold cash accounts, their designated AIFM or the appointed depositary should analyse the cash account set-up in order to ensure that as soon as possible and by no later than 30 June 2023:

• a depositary within the meaning of Article 19(3)(i) is appointed
• an eligible entity is appointed in relation to the opening of cash accounts for such AIFs

CSSF’s communication can be found here.