A variety of steps have been taken to accommodate managers working during the lockdown. As at 29 September 2020, these measures are as follows:
On 20 March 2020, the government increased flexibility for the governance of funds during lockdown orders enacted under the emergency legislation of 20 March 2020 can be found here. These measures were subsequently extended by two laws, respectively on 20 June 2020 and 23 September 2020 and are applicable until 31 December 2020.
Our analysis of the two new laws which were adopted to provide headroom to operating businesses and funds can be found here.
In addition, on 22 May 2020, a law was adopted to extend these measures so that Luxembourg entities have a period of nine months from the end of the financial year to approve their accounts, which would have to be published within one month from such approval. This means that entities whose financial year which ended on 31 December 2019, the deadline for approval is 30 September 2020 with a mandatory filing by 31 October 2020.
The CSSF accepted to grant, upon written request, exceptional extension/suspension of the deadline for the submission of the below listed type of reporting, noting that all extensions with a set deadline as per the below have now expired.
The Luxembourg tax administration has taken the following support measures for Luxembourg companies experiencing liquidity issues:
In order to facilitate working during the lockdown, the CSSF temporarily replaced the prior authorisation / notification for cloud-based outsourcing required by Circular CSSF 17/654 (as amended) by a simple communication by email to the CSSF contact agent of the concerned entity. This exceptional measure does not limit due diligence and risk assessment obligations and the recording of such outsourcing in the cloud register.
The CSSF recommended to all entities under its prudential supervision to authorise their employees to work from home, subject to the following minimum recommendations:
The CSSF closely monitors the outbreak, its business impact and how it may affect the governance and performance of Luxembourg funds. As a result, the CSSF requested any manager (whether or not located within the European Union) to report, on a weekly basis, updates on financial data (total net assets, subscriptions, and redemptions) and the governance of all the Luxembourg funds they manage. Information on this new reporting requirement applicable managers of Luxembourg funds can be found here.
On 7 April 2020, the CSSF updated its FAQ on Swing Pricing Mechanism by UCITS, UCI Part II & SIFs: UCIs can, without prior notification to the CSSF, increase the swing factor to be applied on the NAV up to the maximum level laid down in the prospectus.
The CSSF clarified the conditions applying to the following two scenarios:
The CSSF reserves the right to request on an ex-post basis the UCI to justify the swing factor applied and to provide documentary evidences that such factor was at any time representative of the prevailing market conditions.
As part of the measures taken under the Grand Ducal Regulation of 25 March 2020 (and amended on 1 April 2020) relating to the suspension of procedural deadlines, the obligation for directors or managers of Luxembourg companies to file for bankruptcy (faillite) within 30 days of the cessation of payments is relaxed, but this suspension of the deadline to file for bankruptcy does not exempt management of its other obligations towards stakeholders generally.
Further information can be found here.
In addition, the law of 20 June 2020 extended by 6 months as from the end of the state of crisis (i.e. 24 December 2020) the time limit relating to the filing for cessation of payment in connection with bankruptcy proceedings.
Circular 20/740 of 10 April 2020 provides guidance to all professionals subject to anti-money laundering and counter-terrorism financing who are supervised by the CSSF in relation to money laundering and terrorism financing risks amid the COVID-19 pandemic.
This new circular highlights several new and emerging threats and vulnerabilities resulting from the COVID-19 pandemic with mitigating actions which require specific attention by supervised professionals (e.g. customer due diligence and transactions monitoring).
Since 4 May 2020, a guide from the CSSF including clarifications and additional information is available to assist supervised professionals with tackling the risks identified in that circular.
This guide can be found here.
Following the declaration of the Grand Duchy of Luxembourg to ease the lockdown restrictions, the CSSF recommended to all the supervised entities to take the following measures: