The CSSF issued, on 9 July 2012, Circular 12/540 relating to unlaunched sub-funds, sub-funds waiting to be reactivated and sub-funds in liquidation (Circular 12/540).

Scope

Circular 12/540 is applicable to all legal types of undertaking for collective investment (“UCIs”) that are subject to the law of 17 December 2010 on undertakings for collective investment and to the law of 13 February 2007 on SIFs, although it is worth noting that Circular 12/540 is only applicable to umbrella UCIs (but would include those with only one sub-fund). Single UCIs are not covered by Circular 12/540. As a consequence, Circular 12/540 applies to umbrella UCITS, umbrella part II funds and umbrella SIFs.

Purpose

The purpose of Circular 12/540 is to clarify the legal situation of a:

  • sub-fund that has been approved by the CSSF, but not yet launched (an “unlaunched sub-fund”);
  • ƒsub-fund that has been launched, but has become inactive following redemption of all of its shares/ units (a “sub-fund waiting to be reactivated”); and
  • sub-fund that has been liquidated.

Circular 12/540 specifies that an unlaunched sub-fund and/or a sub-fund waiting to be reactivated must be launched or reactivated within 18 months following its approval by the CSSF or its inactivity.

Unlaunched sub-funds, or sub-funds waiting to be reactivated that were in existence on 9 July 2012, must be launched or reactivated by no later than 8 January 2014.

If the unlaunched sub-fund or the sub-fund waiting to be reactivated has been removed from the offering document of the relevant umbrella UCI, the CSSF will consider that the launch or reactivation of such a sub-fund has been abandoned. If the unlaunched sub-fund or sub-fund waiting to be reactivated has not yet been removed from the offering document, it must be so removed as part of the next update of the offering document, or at the latest within six months of the expiry of the 18-month period.

Liquidated sub-funds will need to be removed from the offering document of the umbrella UCI at its next update, and in any event within six months of the decision to liquidate the sub-fund.

Legal Reporting

Circular 12/540 requires all umbrella UCIs to complete a form (which is available on the CSSF’s website) that shows whether or not there are any sub-funds which are currently inactive, unlaunched or which have already been liquidated, but are still listed in the offering document of the umbrella UCI.

UCIs that have no unlaunched sub-funds, sub-funds waiting to be reactivated or sub-funds in liquidation must also complete and file the form.

The form should reflect the situation at the end of September 2012 and must be sent to the CSSF by 15 October 2012 at the latest.

Conclusion

As a result of Circular 12/540, UCIs will need to determine the fate of an unlaunched sub-fund and/or a sub-fund waiting to be reactivated within a given period of time, which may lead to numerous offering documents of umbrella UCIs being amended to remove sub-funds that will not be launched or reactivated. Furthermore, the CSSF has now set a new deadline with respect to the launch date of new subfunds to ensure that the UCIs in question are aware that sub-funds may not remain inactive or unlaunched for a lengthy period of time, and that a decision will need to be taken in that respect