On 24 August 2012, draft bill no. 6471 (the Bill) implementing the directive 2011/61/EU of 8 June 2011 on alternative investment fund managers (the AIFM Directive) and amending certain Luxembourg laws was submitted to the Luxembourg parliament.

Although the deadline imposed by the European Commission on EU Member States for the implementation of the AIFM Directive into national law is 22 July 2013, it is expected that the Bill will be adopted before the end of 2012 as Luxembourg seeks a first mover advantage.

The implementation of the AIFM Directive in Luxembourg is being made through the amendment of existing Luxembourg legislation. The main non-AIFMD changes proposed by the Bill, in summary, are set forth below.

New Professional of the Financial Sector (PSF)

In addition to banks, a new category of PSF will be entitled to act as depositary for alternative investment funds.

Special Limited Partnership (société en commandite spéciale — SLP)

The Bill introduces the possibility for SIFs or investment companies in risk capital (SICARs) to be incorporated under the legal form of a SLP, which is similar to an English limited partnership in that it is established using a limited partnership agreement, does not have separate legal personality and should be treated as transparent for tax purposes.

Taxation of Carried Interest

The Bill proposes a new beneficial tax regime (subject to compliance with specific conditions) for the employees of alternative investment fund managers and of management companies of an alternative investment fund, but not for the general partner itself. The carried interest received by such an employee will not be considered as a normal “salary” and will, subject to compliance with specific conditions and for a limited time period (maximum period of 11 years), be subject to a reduced favorable tax rate that is 25% of the marginal personal tax rate (i.e. a maximum rate of 10.335%).

Court Supervised Liquidation of a Management Company by the CSSF

Upon approval of the Bill, the Luxembourg regulator will be entitled to request the judicial liquidation of a management company.

Broadened Regime of Delegation of Portfolio Management Functions in Certain Pension Funds

Pension funds created as pension saving associations (associations d’épargne-pension — ASSEPs) or as pension saving companies with variable capital (sociétés d’épargne-pension à capital variable — SEPCAVs) will be able to delegate their portfolio management function to a Luxembourg manager or a manager domiciled elsewhere in the European Union, provided that the delegate is duly authorized to provide these services in accordance with the AIFM Directive.

Changes to Luxembourg Company Law

The Bill proposes to amend the Luxembourg law of 10 August 1915 on commercial companies (as amended) in order to include the possibility of incorporating unregulated commercial enterprises as SLPs and to modernize the existing regimes of common limited partnerships (sociétés en commandite simple) and partnerships limited by shares (sociétés en commandite par actions).

The Bill is being viewed as an additional opportunity to improve the competitiveness of Luxembourg and the proposals included therein have in general been received positively by the asset management industry.