Luxembourg’s financial regulator CSSF plans to make public an online register of European long-term investment funds (Eltifs) on 31 July. The register will be updated every month with new registrations.
Luxembourg’s financial centre stands to do very well with the new generation of Eltifs, with full support from this country’s financial regulator. That’s, of course, assuming that all the regulatory and technical standards details can be ironed out. The grand duchy is already the main international domicile for this type of investment fund.
“We estimate that there is a public interest in the list of Eltifs which we believe are and will significantly complete the range of Luxembourg-domiciled funds,” said Claude Steinbach, a premier conseiller de direction and chef de service in charge of database use at the CSSF, in an email to Investment Officer.
Dedicated page
The list will be hosted on the CSSF website, on a dedicated page, as is the AIF Identifiers dataset. It will be among the statistics/lists the CSSF publishes monthly. As a national competent authority, the CSSF is required to submit its fund data to Esma quarterly.
The data will include the fund’s CSSF identifier, the name of the Eltif/AIF, fund type (Part II/SIF/Raif) and the associated Aifm’s name, country and identifier.
The CSSF declined our request for historical data on Eltifs. It explained that no such releases are planned.
Eltif rebooted
The new public fund list follows the January launch of Eltif 2.0, a redrafting of the Eltif rules in line with the European Commission’s objectives for the Capital Markets Union and the Retail Investment Strategy. The idea is to facilitate greater retail investment, especially in less liquid private markets assets.
According to a market forecast by Scope, Eltifs could reach a tripling in volume to 30-35 billion euros by 2026, up from 13.6 billion in 2023.
The full potential of the Eltif, however, depends on a favourable set of regulatory and technical standards (RTS). The past few months have witnessed competing visions of the Eltif from the European financial regulator Esma and the European Commission.
Inter-institutional dispute
Some in the industry decried Esma’s initial draft as stifling the Eltif’s potential through rigidity and an overly protective view which reduced retail investor interest. The Commission has taken exception and advocated its own more flexible view.
This followed an earlier dispute between French regulator the AMF and Luxembourg’s CSSF, again over the flexibility issue.
The Eltif register maintained by Esma currently lists 119 Eltifs, of which 80 are registered in Luxembourg. However, only a subset are managed by Luxembourg AIFMs.
The the quarterly pace of reporting from the CSSF to Esma means there is a lag in the accuracy of the Esma Eltif data, further complicated because it’s compiled from data sent in by regulators in Spain, France, Ireland, Italy and Luxembourg.
Tax incentives drive boom
Italy and France featured much greater use of the earlier Eltif legislation, as it was used as a pension-saving instrument. French investors, driven by these tax incentives, are driving the boom in Eltifs today.
A search of the CSSF’s AIF Identifiers dataset end of June found a total of 57 Eltifs managed by a Luxembourg AIFM. The CSSF’s data does not include any Eltifs managed by non-Luxembourg AIFMs. In the first half of 2024, there were 10 new Eltifs added to the CSSF’s dataset.
Investment Officer used open-source relational database management software and structured query language (SQL) to match and analyse the Esma Eltif data together with the CSSF AIF Identifiers file. The analysis found that all but 23 funds could be matched, with 20 managed by non-Luxembourg-located AIFMs.
Tracking down exceptions
The three Luxembourg-registered funds that didn’t appear in the CSSF AIF identifiers data “have either changed their name or are no longer offered to investors,” explained Steinbach. “These changes will be reflected in the upcoming Esma list,” he added.
The AIF Identifiers “file is generated daily and essentially for the AIFMD reporting purposes for the LU-AIFMs,” explained Steinbach. The data is not all added to the table at once, taking 2 or 3 months for all the records to be added.