CSSF

Fund administrators active in Luxembourg will be required to produce an annual report on their governance and internal organisation from next year onwards as part of a long-awaited effort by financial supervisor CSSF to modernise a 30-year old supervisory framework in this field.

Total assets under management in the European fund industry fell to 14.5 trillion euro at the end of the first quarter from 15.3 trillion at the end of last year, according to the latest European Fund Markets Report by Refinitiv Lipper. 

The negative performance of the underlying markets contributed negative 696.4 billion euro to the decline over the quarter, while estimated net flows summed up to negative 88.6 billion euro by the end of March. 

Although growth in Luxembourg’s alternative investment funds market slowed in 2020, it remained significant, bringing the total of alternative assets managed in the Grand Duchy above the 1000-billion-euro mark for a first time, according to new data released by financial regulator CSSF. 

Funds exposed to the Ukraine war have new liquidity management options following the recent publication of the CSSF’s guidance. To understand more about how the market is adapting , particularly during the current annual reporting season, we spoke to Nicolas Hennebert, partner and investment management leader audit & assurance at Deloitte Luxembourg.

With its DLT white paper released in January, supervisor CSSF has triggered a broad industry debate on the use blockchain technology to adopt virtual assets, and about public versus private blockchains. The discussion is seen as positive, and, according to one industry expert, could pave the way “for mass adoption of asset tokenisation”.

Revenue from corporate banking activities in Luxembourg has risen nearly 60 percent since 2016 to approximately 3 billion euro, according to a new study conducted by consultancy firm PWC. The consultants also found a need for the government and regulators to join the banking sector on its innovation journey in order to address regulation challenges. 

Luxembourg’s financial supervisor, releasing its eagerly anticipated guidance for investment funds exposed to Russia, has outlined a range of segregation options to handle stranded assets in Russia. Funds also were reminded to assess if they are potentially in breach of sanctions against Russia and Belarus. 

Tech advisory and investment firm GP Bullhound on Monday said it is opening an Luxembourg office after the national supervisor gave a green light to application for a licence as Alternative Investment Fund Manager, or AIFM. In parallel to the Luxembourg launch, the company is opening a new office in Zurich.

The Luxembourg fund industry was given its ESG marching orders last week by CSSF CEO Claude Marx at the Alfi European Asset Management conference. “I am sometimes irritated by those who over inflate small issues or imperfections in this area,” he said.

Corinne Lamesch, chair of the board at the Association of the Luxembourg Fund Industry (Alfi), speaks to InvestmentOfficer.lu for a podcast about current challenges facing the asset management industry, specifically in dealing with investment funds exposed to Russian assets and the implementation of sanctions against Russia, and in sustainable finance and ESG.