Financial supervisor CSSF is putting on the thumbscrews. It has imposed individual financial fines on a total of seven managers and directors at two specialised investment funds in Luxembourg. The fines were issued because they sent “incomplete information” to the supervisor. It is the first time such fines were issued under a 2007 law that governs these funds.
The authority did not identify the names of the sanctioned individuals, nor the firms they worked for. The fines were issued in relation to two separate investment funds, CSSF said on Monday.
Separately on Monday, CSSF announced a barrage of ten fines - each between 5,000 and 20,000 euros - for relatively small, obscure investment management companies who had failed to submitted the supervisor’s online survey related to the fight against money laundering. The list of firms fined includes Bedrock I GP, ESO Management, Historic Car Invest, Glacier Capital, Max Gain Capital, Voshkod Capital, Lia Luxembourg, Mbu General Partners, Gpmg and GFI.
Both individual fines involved managers of specialist investment funds known as SIFs. These funds can invest in all types of assets. They are subject to a lower degree of supervision than general-public Ucits funds and often target investors who have confirmed they qualify for the “well-informed” investor status and who invest a minimum of 125,000 euro. Luxembourg hosts 1,318 SIFs.
An individual administrative fine amounting to 10,000 euro was issued to two managers of the general partner of a specialised investment fund on 3 October “due to the provision of incomplete information to the CSSF”. Luxembourg law permits the authority to issue fines ranging from 125 to 12,500 euro for such offences.
Remedial actions
For a similar offence, a 5,000 euro fine was issued on 10 October to five directors of the general partner of another SIF. CSSF said it took into consideration the remedial actions undertaken by the directors during the procedure, which resulted in a smaller fine.
It is the first time that CSSF has made public individual fines under the 2007 SIF law. The law requires managers to provide correct information to the supervisor. It enables CSSF to issue fines for firms that refuse to provide financial reports, that provide incomplete, inaccurate or false information when requested, or that fail to issue a prospectus when a fund is issued.
The individual fines announced on Monday are the first such fines that CSSF imposed since 2018, according to historical information on the CSSF website. In 2018, two individuals were sanctioned with administrative fines of respectively 42.150 euro and 250,000 euro for market abuse violations. In 2017, CSSF imposed fines ranging from 25,000 euro to 40,000 euro on a number of individuals that had engaged in market manipulation through a company’s share buy-back programme.