On 7 July 2020, the Commission de Surveillance du Secteur Financier (CSSF) published a list of questions and answers in relation to the provisions of CSSF Circular 02/77 (the Circular). The Circular concerns the protection of investors in case of net asset value (NAV) calculation errors and correction of the consequences resulting from non-compliance with the investment rules applicable to undertakings for collective investment.
The purpose of the Circular is to set out the minimum rules of conduct to be followed by collective investment professionals in Luxembourg in case of errors in the administration or management of UCITS and undertakings for collective investment (UCI) for which they are responsible. Reserved Alternative Investment Funds (RAIFs) and unregulated funds (such as special limited partnerships - SCSp) with either a sub-threshold AIFM or an authorised AIFM are not within scope.
The FAQ cover the general application of the Circular, selection of the correction method and tolerance threshold of the Circular.
The FAQ also include a very helpful decision tree for NAV calculation errors, investment breaches, and the use of the economic/accounting method, respectively.
The list of FAQ applies to UCITS and UCI subject to part II of the 2010 Law and outlines the principles to be applied by specialised investment funds-SIFs.
CSSF FAQ can be found here.
The Circular can be found here.