Luxembourg Investment Vehicles
Foreword
In the 2019/2020 edition of the Luxembourg Investment
Vehicles publication, we are delighted to give you a
general overview of the main regulated and supervised
fund vehicles across all asset classes and investment
strategies that can be established in Luxembourg.
This overview will help you better understand the set-up
and operating requirements of the structures available.
It covers the following aspects:
■legal and regulatory requirements
■shareholding
■reporting requirements
■approval and supervision
■taxation
The sea of voices directly influencing the
regulatory agenda
The asset and fund management industry has
flourished in the last decade, with surveys boasting an
approximately 65% growth since 2007 to over USD$80
trillion in worldwide assets under management.
As the recognition of the industry's importance to the
world's financial system increases - in linking investors
with enterprises and activities needing funding - so
does the prominence of the industry and regulators that
police the sector.
A range of "external" voices are placing the industry and
regulators under intense pressure, including demanding
investors and consumer groups, clamoring political and
economic needs, civil society's ever-evolving priorities
and expectations, an increasingly noisy press, the
explosion of social media and the rapid growth of
new technologies.
A fundamental rethink of firms' mindset and
investment offerings is required
Structures and remits are in flux as regulators and
supervisors adapt their agendas and working methods
to a dynamic environment. The sector's supervision
continues to broaden and deepen, while supervisors
embrace technology to help perform their roles more
efficiently.
While some areas and jurisdictions are creating new
rules, agendas are increasingly tackling the monitoring
and reviewing of the myriad of post-crisis rules. Policy-
makers and regulators demand more and more data,
while the industry and institutional investors press for
the rationalization of requirements and greater global
regulatory convergence.
In the wake of the 2008 financial crisis, policy-
makers and regulators overwhelmingly prioritized the
identification and containment of systemic risks. Eleven
years later the financial crisis may be a distant memory
for many, but policymakers are still highly attuned to
market fragility. This, in turn, increases the call for more
data.
As the asset management industry expands, the debate
around it intensifies. And there are conflicting views
about what the correct regulatory response should
be. Regulators are deepening their examination of
the sector's systemic risks, focusing on liquidity and
leverage. Exchange-traded and money market funds
remain on their watch list.
Governance and conduct are global regulatory
preoccupations. That ethos is spreading. It is no
longer enough for firms to simply adhere to rules and
regulations. They need to think more broadly about the
impact of their culture and conduct. The public loudly
demands that firms serve their clients with skill and
care.
Calls are increasing around the world for individuals
in the financial services industry to be held personally
accountable for their actions. Diversity, remuneration
and stewardship are all hot topics. Fund distribution and
financial advice rules continue to be strengthened, and
the industry's governance of delegated or outsourced
activities is under scrutiny.
"
It is no longer enough for
firms to simply adhere to rules
and regulations. They need
to think more broadly about
the impact of their culture and
conduct.
Ravi Beegun
Partner
"
Luxembourg Investment Vehicles
KPMG
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