This new circular continues to address errors in NAV calculation, investment rule breaches, and other errors in collective investment undertakings (UCIs) but has been updated to take into account legal, industry, and CSSF administrative practice changes since the date of the original circular.

The scope is clearly extended to apply to various types of funds regulated by the CSSF, including Specialised Investment Funds, Société d'Investissement en Capital à Risque, Money Market Funds, European Long-Term Investment Funds, European Venture Capital Funds, and European Social Entrepreneurship Funds.

The circular addressed the roles and responsibilities of both the board and/or general partner of each respective fund, as well as those of the Investment Fund Manager, (even if not based in Luxembourg), specifying their respective responsibilities. Additionally, the circular extends its scope to include service providers, such as depositories and central administrators.

The circular covers guidelines for managing errors in UCIs, including NAV calculation errors, investment rule breaches, and other errors like cost payment or swing pricing. It provides a framework for handling different types of funds and sets tolerance thresholds for NAV calculation errors.

Non-compliance with a list of laws and regulations dealing with investment rules and eligibility of assets are now listed in the new circular, a breach of which is regarded as an active breach and triggers reporting and possible indemnification obligations.

Additionally, the circular aims to clarify guidelines previously provided by the CSSF through FAQs and activity reports, integrating administrative practices applied by the CSSF.

By implementing these guidelines, UCI managers and stakeholders contribute to maintaining investor confidence in Luxembourg's investment management sector. The updated regime also supports CSSF's risk-based supervision of UCIs.

Circular CSSF 24/856 will be effective from 1 January 2025, replacing Circular CSSF 02/77. The text is currently available only in French, with an English version to be published in due course and can be found here.

The press release can be found here.