On 11 October 2019, the Commission de Surveillance du Secteur Financier (CSSF) issued a press release with respect to additional mandatory notification to be made by UK managers in the context of a hard Brexit.

UK managers of alternative investment funds (AIFs) established in Luxembourg, whether regulated under a sectorial law or not, that are currently appointed in compliance with article 4 of the Luxembourg law of 12 July 2013 on alternative investment fund managers ("UK Managers") were given the possibility of benefitting from a transitional period in respect of existing contracts in accordance with the provisions of the law of 8 April 2019 ("Brexit law"). Notifications of such existing contracts were due no later than 15 September 2019.

As of 1 November 2019, in the event of a Brexit without an agreement, UK Managers that have not proceeded with such notification will not benefit from the transitional period and will lose the benefit of their passporting rights under Directive 2011/61/EU ("AIFMD").

UK Managers are then required to (i) seek, prior to 31 October 2019, the approval of the investors of the AIFs they manage in order to remain a third-country manager after the occurrence of a hard Brexit and (ii) submit documents by email to brexitopc@cssf.lu evidencing such approval or the circumstances justifying a delay for not having obtained it by such date.

If the UK Managers fail to comply with these requirements, they will be considered by the CSSF as operating in breach of Luxembourg's applicable requirements as of the day of the hard Brexit, and the CSSF may publish the list of such UK Managers.

It is critical to bear in mind that the benefit of the transitional period is subject to a restructuring action from the UK managers, who would have to provide evidence to the regulator of their business plan, which could notably entail (i) the re-domiciliation in Luxembourg, (ii) the appointment of another EU-based AIFM or (iii) the liquidation of the fund range of EU AIFs they managed.

For UK Managers having submitted a notification to benefit from the transitional period, they may recall their notification in order to be treated as a third-country manager after the occurrence of a hard Brexit. The requirements described above shall then apply to them with the same deadline of 31 October 2019.

UK managers have to make a decision before the end of this month.

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