The head of Luxembourg’s top financial regulator on Tuesday called on the country’s asset management industry to step up its efforts and make sure that Russian oligarchs don’t evade sanctions by hiding their money in European investment funds.
“It is really about your own reputation, and the reputation of Luxembourg,” said Claude Marx, director general of CSSF,” addressing the Alfi European Asset Management conference in Luxembourg. “This is an appeal to all of you to really make sure that we don’t have this in the systems, and if we do have, that it is properly dealt with.”
Marx specifically referred to initiatives by investigative journalists such as the Russia Assets Tracker, launched on Monday by the Organised Crime and Corruption Reporting Project, and similar efforts by the International Consortium of Investigative Journalists, known as ICIJ.
‘We need to know’
“We wouldn’t want to find out, in the latest initiative of ICIJ for instance… that we have large investors in Luxembourg funds that are sanctioned, without the professionals having found out and blocked the relevant investments,” the head of Luxembourg’s national financial regulator told delegates at the Luxembourg conference.
“As far as the investor side is concerned, it is very important we make sure that we do not have sanctioned oligarchs investing in funds, and if we do have, they have to be reported to the ministry of finance because they are the competent authority for this and we need to be copied. Likewise on the investments if there are investments in sanctioned securities this also needs to be announced to the ministry of finance and us.”
CSSF, responsible for supervising an asset management ecosystem which includes approximately 15.000 investment funds, in recent weeks has issued a number of guidance documents to help asset management professionals deal with the implementation of EU and international sanctions against Russian individuals close to Russian President Vladimir Putin.
Value chain needs to play its role
“It is very important that all actors in the value chain play their roles, from the depository banks, the TA (transfer agency, ed.), the register, the central administration, the investment fund management obviously. We have made a certain number of reminders and have also written to professionals.”
In some specific cases, interpretations questions have risen on “some very technical aspects,” he said, which can be dealt with by the European Commission.
In Luxembourg, the asset management industry body Alfi, host of the conference today, also acts as interlocutor between the industry and CSSF.