As the Luxembourgish regulator CSSF recently reminded*, all cash of an (regulated) AIF domiciled in Luxembourg has to be booked in cash account held by an “Eligible Entity”, according to Article 19(7) of the AIFM Law. Considered as eligible entities are only central banks, EU authorised credit institutions as well as third country authorised banks. Electronic money institutions (“EMI”) or payment institutions (“PI”) are not considered as eligible.
This leads to two instructions for action for existing and future AIFs:
- Existing AIFs for which an EMI or PI has been appointed to maintain cash accounts should ensure that their designated AIFM or appointed depositary appoints an Eligible Entity as soon as possible, but no later than June 30, 2023.
- Any new AIF must ensure that the cash accounts will be held by an Eligible Entity. No new sub-funds can be set up within AIFs for which the cash accounts are currently held by an EMI or PI.
*CSSF Communiqué on Luxembourg alternative investment funds (AIFs) of October 18,2022
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