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Part I (UCITS) Part II (UCIs) 3. Transferable securities and money market instruments admitted to official listing on a stock exchange in a non-member state of the EU or dealt in on another market in a non-member state of the EU which is regulated, operates regularly and is recognised and open to the public, provided that the choice of the stock exchange or market has been provided for in the constitutional documents of the UCITS; 4. Recently issued transferable securities and money market instruments, provided that: The terms of issue include an undertaking that application will be made for admission to official listing on a stock exchange or on another regulated market as described under (1)-(3) above; Such admission is secured within one year of issue. 5. Units of UCITS and/or other UCIs within the meaning of the first and second indents of article 1(2) of the UCITS Directive, whether situated in an EU member state or in another state, provided that: Such other UCIs are authorised under laws which provide that they are subject to supervision considered by the CSSF to be equivalent to that laid down in Community law, and that ooperation between authorities is sufficiently ensured; The level of protection for unitholders in such other UCIs is equivalent to that provided for unitholders in a UCITS, and in particular that the rules on assets segregation, borrowing, lending, and uncovered sales of transferable securities and money market instruments are equivalent to the requirements of the UCITS Directive; The business of the other UCIs is reported in half-yearly and annual reports to enable an assessment of the assets and liabilities, income and operations over the reporting period; No more than 10% of the assets of the UCITS or of the other UCIs, the acquisition of which is contemplated, can, according to their constitutional documents, in the aggregate be invested in units of other UCITS or other UCIs. 6. Deposits with credit institutions which are repayable on demand or have the right to be withdrawn, and which mature in no more than 12 months, provided that the credit institution has its registered office in a member state of the EU or, if the registered office of the credit institution is situated in a non-member state, provided that it is subject to prudential rules considered by the CSSF to be equivalent to those laid down in Community law; Investment limits applicable to UCIs investing in transferable securities which do not represent investments in real estate or venture capital are the following: No more than 10% of the net assets may be invested in securities not listed on a stock exchange or dealt in on another regulated market which operates regularly and is recognised and open to the public; No more than 10% of the securities of the same kind issued by the same issuing body may be acquired; and No more than 10% of the net assets may be invested in securities issued by the same issuing body. These restrictions are not applicable to securities issued or guaranteed by a member state of the OECD or their local authorities or a public international body with an EU, regional or worldwide scope. Units/shares of closed-ended investment funds are treated in the same way as other transferable securities and are therefore subject to the general rules applicable to transferable securities. UCIs may borrow up to 25% of their net assets (except leveraged UCIs where the investment policy provides for a permanent borrowing for investment purposes of at least 25% of their net assets); Derogations to Circular 91/75 may be granted on a case-by-case basis; 8
Part I (UCITS) Part II (UCIs) 7. Financial derivative instruments, including equivalent cash-settled instruments, dealt in on a regulated market referred to in (1), (2) and (3) above, and / or financial derivative instruments dealt in over the counter (“OTC derivatives”), provided that: The underlying consists of instruments covered by article 41 (1) of the 2002 Law, financial indices, interest rates, foreign exchange rates or currencies, in which the UCITS may invest according to its investment objectives; The counterparties to OTC derivative transactions are institutions subject to prudential supervision, and belonging to the categories approved by the CSSF; and The OTC derivatives are subject to reliable and verifiable valuation on a daily basis and can be sold, liquidated or closed by an offsetting transaction at any time at their fair value at the UCITS’ initiative. 8. Money market instruments other than those dealt in on a regulated market, to the extent that the issue or the issuer of such instruments is itself regulated for the purpose of protecting investors and savings, and provided that such instruments are: Issued or guaranteed by a central, regional or local authority or by a central bank of an EU member state, the European Central Bank, the EU or the European Investment Bank, a non-member state of the EU or, in case of a federal state, by one of the members making up the federation, or by a public international body to which one or more EU member states belong, or Issued by an undertaking any securities of which are dealt in on regulated markets referred to in (1), (2) or (3) above, or Issued or guaranteed by an establishment subject to prudential supervision, in accordance with criteria defined by Community law, or by an establishment which is subject to and complies with prudential rules considered by the CSSF to be at least as stringent as those laid down by Community law; or Issued by other bodies belonging to the categories approved by the CSSF provided that investments in such instruments are subject to investor protection equivalent to that laid down in the first, second or third indent and provided that the issuer is a company whose capital and reserves amount to at least EUR 10 million and Specific rules regarding UCIs pursuing alternative investment strategies (hedge funds and funds of hedge funds) are set out in Circular 02/80 and consist, in particular, of: Risk-diversification rules regarding short sales; Restrictions applicable to target UCIs; Restrictions relating to financial derivative instruments; Provisions applicable to securities lending transactions; and Provisions applicable to sale with right of repurchase transactions and repurchase transactions. 9
Page 1: investment management setting up an
Page 4 and 5: definitions 1993 Law Law of 5 April
Page 6 and 7: I. legal framework for setting up a
Page 10 and 11: Part I (UCITS) Part II (UCIs) which
Page 12 and 13: III. specialised investment funds (
Page 14 and 15: IV. available structures The 2002 L
Page 16 and 17: One or more classes of shares or un
Page 18 and 19: V. main players 1. The management c
Page 20 and 21: 3. The central administration agent
Page 22 and 23: VII. taxation 2002 Law 2007 Law Sub
Page 24: VIII. once-off and ongoing costs at
Page 28: ALFI thanks Arendt & Medernach, whi

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