Part II Funds: Amendment to depositary regime

The adoption process of the Bill of Law 7024 is almost finalised. This Bill of Law includes amendments to the Law of 17 December 2010 on undertakings for collective investment ("UCI Law") and the Law of 12 July 2013 on Alternative Investment Fund Managers ("AIFM Law") to clarify the depositary regime applicable to Part II Funds (i.e. funds governed by Part II of the UCI Law).

In the recent government amendments published on 5 April 2017, no change is made to the distinction introduced by the initial proposal:

• Part II Funds whose offering documents prohibit marketing to retail investors on Luxembourg territory are subject to the AIFMD depositary regime, as implemented by Article 19 of the AIFM Law.
• Part II Funds that may be marketed to retail investors on Luxembourg territory are subject to the somewhat more stringent UCITS V Directive depositary regime, as implemented by Article 17 et seq. of the UCI Law.

The Bill is expected to be adopted in Q2 or Q3 2017.