Published on 17 February 2026 Email this Share this on LinkedIn Share this on Facebook Communiqué Update of the CSSF FAQ concerning the Luxembourg Law of 17 December 2010 with regard to the portfolio
Article 5
(4)of the Law of 2013 such as investment advice, administration of units of UCIs or, for authorised AIFM, reception and transmission of orders (“RTO”). Those delegate IFMs are not subject to the full scope of MiFID rules, only Articles 1-1, 37-1 and 373 of the Law of 1993/Articles 15, 16, 24 and 25 of MiFID, apply. The delegate IFMs are not authorised to provide other MiFID services or activities than those covered under Article 101
(3)
Article 5(4) of the Law of 2013. 5. Do Mi
FID rules apply to the marketing of funds? Modified on 3 April 2024 Marketing of funds is part of the functions included in the collective portfolio management. Consequently, if the authorisation of an IFM includes the marketing function, the IFM can perform the marketing for the funds under its management (“direct marketing”). If, in relation to a fund under its management, the IFM does not perform the marketing function itself, the exemption foreseen under Article 1-1
(2)(i) of the Law of 1993/Article 2
(1)(i) of MiFID does not apply but MiFID rules may apply to the entity undertaking the marketing function depending on where and to whom the fund is distributed, and on the services provided, in which case and, to the extent such entity is another IFM established in Luxembourg, an additional authorisation under FAQ LAW OF 17 DECEMBER 2010 Version 23 – 17 February 2026 37/43 Article 101
(3)
Article 5(4) of the Law of 2013 (as applicable) may be required for such other IFM.
No such additional authorisation is required if such other IFM only brings together a potential investor with an IFM and / or its investment fund without however providing the investment service of reception and transmission of orders. It is however the responsibility of such other IFM to assess to what extent the activities undertaken do or not qualify as pre-marketing as defined in Article 1
(581)of the Law of 2013/Article 4
(1)(aea) of the AIFMD or marketing of funds as further clarified under question 7 hereunder. 6. Do MiFID rules apply when an IFM delegates the marketing to another IFM? Published on 10 June 2021 As explained under question 5, if an IFM does not operate the activity of marketing by itself, the exemption foreseen under Article 1-1
(2)(i) of the Law of 1993/Article 2
(1)(i) of MiFID does not apply. Any Luxembourg IFM that markets funds that it does not directly manage on behalf of another IFM, acts as an intermediary as any investment firm covered by MIFID and must therefore be authorised under Article 101
(3)
Article 5
(4)of the Law of 2013, depending on the type of fund and services offered, namely discretionary portfolio management and, in addition, at least, safekeeping and administration of UCIs or, for authorised AIFMs, RTO relating to UCIs. In such case, Articles 1-1, 37-1 and 37-3 of the Law of 1993/Articles 15, 16, 24 and 25 of MiFID, will be applicable to the Luxembourg IFM. EU IFMs marketing on behalf of another IFM, in Luxembourg, funds that they do not manage directly, must be authorised under Article 6
(3)of the UCITS Directive or under Article 6
(4)of the AIFM Directive.
- Which MiFID investment services may be considered as marketing of funds? Published on 10 June 2021 The marketing of funds is not an investment service “per se” under MiFID as it is not part of the list of services and activities included in sections A and C Annex II of the Law of 1993/sections A and B of Annex I of MiFID. However, the following MiFID services may be used for the distribution of funds: • Reception and transmission of orders relating to UCIs; • Execution of orders on behalf of clients; • Dealing on own account; • Portfolio management; • Investment advice; • Underwriting and/or placing of UCIs on a firm commitment basis; • Placing of UCIs without a firm commitment basis. FAQ LAW OF 17 DECEMBER 2010 Version 23 – 17 February 2026 38/43
- Is investment advice included in the activity of collective portfolio management? Published on 10 June 2021 No. Investment advice is not listed in the functions included in the activity of collective portfolio management under Annex II of the Law of 2010 or Annex I of the Law of
- Do MiFID rules apply to investment advisors when they provide investment advice to an IFM? Published on 10 June 2021 Yes. As per Article 9 of MiFID Delegated Regulation 2017/565, investment advice given to an IFM that enable to take an investment decision, qualify as personal recommendations issued to a client under MiFID as the recommendations are not issued exclusively to the public. Consequently, third parties that provide investment advice relating to financial instruments as defined under section B of Annex II of the Law of 1993/section C Annex I of MiFID, to UCI/IFM, to an IFM, are in principle subject to MiFID rules.
- Are IFMs authorised to provide investment advice to another IFM? Published on 10 June 2021 No, except if the IFM is also authorised under Article 101
(3)(b)
Article 5(4)(b)(i) of the Law of 2013, to provide investment advice. 11. Which Mi
FID exemptions may apply to third parties providing investment services to IFM? Published on 10 June 2021 The third parties providing investment services to IFMs may benefit from the following exemptions: a) Specific exemptions under the Law of 1993/MiFID: • Intragroup service exemption under Article 1-1
(2)(
- b)and (
- c)of the Law of 1993/Article 2
(1)(b) of MiFID. • Service complementary to their professional activities as foreseen under Article 1-1
(2)(d) of the Law of 1993/Article 2
(1)(c) of MiFID. • Investment advice not specifically remunerated rendered in the course of providing another professional activity not covered by MiFID under Article 1-1
(2)(l) of the Law of 1993/Article 2
(1)(
- k)of MiFID.
- b)Partial exemption from MiFID rules: • Authorised EU IFM rendering discretionary portfolio management and non-core services under Article 101
(3)of the Law of 2010/Article 5
(4)of the Law of 2013 are subject to Articles 1-1, 37-1 and 37-3 of the Law of 1993/Articles 15, 16, 24 and 25 of MiFID. In any case, the third parties must be able to demonstrate that they fall within the scope of an exemption, should they provide services without an authorisation under the MIFID applicable framework. FAQ LAW OF 17 DECEMBER 2010 Version 23 – 17 February 2026 39/43 11. Treatment of breaches of the UCITS global exposure limit 1. Do passive investment breaches (i.e. a breach beyond the control of the UCITS) by a UCITS of the global exposure limit of Article 42
(3)of the Law of 2010 (and more generally of investment restrictions applicable to UCI) have to be notified to the CSSF? Published on 17 August 2021 No. 2. Can breaches of the VaR limit (either the maximum limit laid down in regulation (20% for absolute VaR or 200% for relative VaR as the case may
- be)or any other more restrictive internal limit set below the above regulatory thresholds, as laid down in the sales prospectus) by UCITS as a result of the increase of volatility in financial markets (in the absence of any new positions increasing the risk of the portfolio) be considered as passive breaches? Published on 17 August 2021 Yes. 3. What are the expectations of the CSSF in case of a passive breach (i.e. beyond the control of the UCITS, e.g. increase of volatility in the financial markets) of the regulatory VaR limit or the internal VaR limit laid down in the prospectus? Published on 17 August 2021 Investment fund managers should take appropriate steps to meet the limit within a reasonable time period, thereby taking due account of the prevailing market conditions and of the best interests of investors. For that purpose, they have to closely monitor the situation of the UCITS as well as the defined remediation plan. Upon occurrence of a passive breach, any additional risk exposure taken by the UCITS increasing the overall level of risk of the portfolio (i.e. VaR usage increasing) should be viewed as an active investment breach. The passive breach should however not preclude the UCITS from continuing to manage the fund (for example, concluding investments following subscriptions in the fund). If a new position does not increase the level of risk of the UCITS (i.e. VaR consumption is not increasing), it should not be viewed as an active breach. 4. What information do UCITS have to communicate to the CSSF (opc.prud.sp@cssf.
- lu)in relation to an active breach of the VaR limit (whether the maximum limit laid down in regulation – 20% for absolute FAQ LAW OF 17 DECEMBER 2010 Version 23 – 17 February 2026 40/43 VaR or 200% for relative VaR - or the internal limit, below the above regulatory thresholds, as laid down in the sales prospectus)? Modified on 2 January 2025 The notification to the CSSF should include at least the following information: • the legal name of the notifying person/entity and the corresponding CSSF identifier of the entity; • the legal name of the fund and the sub-fund, and the corresponding CSSF code of the • the VaR computation method (absolute VaR or relative VaR); • the internal VaR limit (if prospectus mentioned a limit below the regulatory limit); • the VaR limit consumption; • the date when the active breach occurred and the date when the breach ended; • the reason(
- s)of the breach (i.e. new position, redemptions which miss to be managed fund and the sub-fund; by the fund manager, etc.); If needed, the CSSF may ask additional explanations. In these cases the investment fund managers should not use the UCI forms for the notification of errors and instances of non-compliance under Circular CSSF 24/856, but they should notify the CSSF by email to the following address: opc.prud.sp@cssf.lu. 12. UCITS ETFs 1. What are the portfolio transparency requirements applicable to UCITS ETFs? Modified on 17 February 2026 Pursuant to the ESMA ETFs guidelines, a UCITS ETF is a UCITS at least one unit or share class of which is traded throughout the day on at least one regulated market or Multilateral Trading Facility with at least one market maker which takes action to ensure that the stock exchange value of its units or shares does not significantly vary from its net asset value. In order to enable market makers to take such action and hedge their risks, they receive typically on a daily basis, appropriate information on portfolio holdings in the form of a Portfolio Composition File (“PCF”). In addition, IFMs should publish the detailed portfolio holdings of the UCITS ETFs they manage. In order to protect their proprietary information (such as analytical research and personal judgement) and prevent other market participants from being able to replicate their investment strategy, IFMs may choose to publish portfolio holdings at a lower frequency than for the PCF and/or with a time lag. IFMs should comply with the following conditions relating to portfolio transparency with respect to UCITS ETFs: FAQ LAW OF 17 DECEMBER 2010 Version 23 – 17 February 2026 41/43 - In accordance with the IOSCO principles on ETFs 2, UCITS ETFs should publish the full portfolio holdings, including at least the identities and quantities (e.g. weightings) of the holdings held by the fund, to all investors as frequently as practicable. This information shall be published at least on a quarterly basis with a maximum time lag of 30 business days. IFMs should document the relevance and appropriateness of their approach in relation to frequency of the portfolio publication and the time lag, thereby taking notably into account the need to protect proprietary information, the type of investors, local securities exchange rules and the overall efficiency of arbitrage activities. - The transmission of the PCF to Authorised Participants (“APs”) and Market Makers (“MMs”) must adhere to the following principles: The PCF must be sent to APs/MMs simultaneously, using the same secure communication channel; Intraday transactions planned by the IFM / delegated portfolio manager should not be communicated to APs/MMs. To prevent APs/MMs from identifying specific securities that will be bought or sold, the communication should be limited to a general description of the contemplated transactions. This communication must be sent to all APs/MMs with whom the IFM has set up a contract, at the same time and through the same secure communication channel. - The CSSF considers that the UCITS ETF should inform investors of the frequency and related time lag (if any) of the portfolio publication. Therefore, in accordance with paragraph 17 of the ESMA ETFs guidelines, a UCITS ETF should notably disclose clearly in its prospectus the policy regarding portfolio transparency, and where information on the portfolio as well as on the frequency and time lag of the portfolio publication may be obtained. - To address potential asymmetry of information between APs/MMs and other investors, APs/MMs must be bound by a confidentiality clause with the IFM requiring to disclose information received from the IFM on portfolio holdings and planned transactions only to people who need to know this information in the course of the duties related to AP/MM functions. - In line with the Good Practices Relating to the Implementation of the IOSCO Principles for Exchange Traded Funds, IFMs are encouraged to promote competition in ETF arbitrage and market making by contracting with multiple APs and MMs in their ETFs. IFMs should also be able to demonstrate that they are taking steps to ensure that the selected APs/MMs contracting with the IFM provide acceptable bid/offer price spreads. In this respect, IFMs are free not to contract with entities whose primary objective is not to provide liquidity, ensure efficient arbitrage or support an active secondary market for the ETF. Typically, this includes entities that would not prioritise offering quality liquidity in normal circumstances. - IFMs (or where applicable self-managed SICAVs) and the third parties (e.g. APs/MMs) must establish procedures to ensure compliance with the Market Abuse Regulation (or similar Principles for the Regulation of Exchange Traded Funds dated June 2013 and related Good Practices Relating to the Implementation of the IOSCO Principles for Exchange Traded Funds dated May 2023 2 FAQ LAW OF 17 DECEMBER 2010 Version 23 – 17 February 2026 42/43 local regulation). This also includes procedures for identifying inside information and managing it according to the requirements of this regulation. FAQ LAW OF 17 DECEMBER 2010 Version 23 – 17 February 2026 43/43