On 31 August 2021, the Commission de Surveillance du Secteur Financier (the “CSSF”) published a communication update in relation to the requirement to submit liquidation extension request for funds in non-judicial liquidation (the “Communication”), whereby it informs the market that, effective immediately, liquidators will no longer be required to request an extension of the liquidation period when the initial timing for the closing of the liquidation is no longer expected to be reached. The CSSF usually expects that the liquidation of a fund be finalized within one year as of the date of its opening. Until the date of the Communication liquidators had to receive CSSF’s approval on the extension of the liquidation period and on its timing.
Liquidations covered by the end of the extension request
As per the Communication, the end of the extension request applies “to non-judicial liquidation of funds”. As a reminder, the CSSF is the competent authority to supervise the liquidation of funds that are ordinarily under its supervision, that is to say UCITS, Part II funds, SIF and SICAR (“Regulated Funds”). As the CSSF does not directly supervise RAIFs or other unregulated structures qualifying as investment funds, Communication is irrelevant for these funds.
The CSSF is competent when the liquidation is non-judicial, which is the case when the liquidation was not ordered by a court. The non-judicial liquidation of a legal structure is generally decided by the general meeting of the shareholders (the manager in case of mutual funds). Non-judicial liquidations represent the vast majority of fund liquidations in Luxembourg.
The end of the extension request is only applicable in case the entire fund legal structure is terminated with the liquidation. In fact, the Communication expressly mentions that sub-funds of funds that are still on the official list and consequently not in non-judicial liquidation are still required to file an extension request when a period of 9 months has expired.
Ongoing supervision of the liquidations
The CSSF will carry on supervising and monitoring the progress of the liquidation of Regulated Funds through the different reports that liquidators are required to send it from time to time.
In particular, the CSSF has updated the form “Periodical report from the liquidator on the progress of the liquidation” which needs to be filed with the CSSF, twice a year, in electronic form according to the following deadlines:
- For reports covering the period from 1 January to 30 June: the report must be submitted no later than 30 September of the same calendar year; and
- For reports covering the period from 1 July to 31 December: the report must be submitted no later than 31 March of the following year.
Outside of these regular reports, the Communication also reminds liquidators that the CSSF shall be informed, without delay, of any significant issue that they might be facing in the context of the liquidation.
The CSSF shall also carry on receiving financial information about the funds. The financial information to be provided to the CSSF includes the liquidator's reports for each accounting period during the liquidation.
Upon closing of the liquidation, liquidators will remain responsible to ensure that the liquidation closing statement, their report on the liquidation and the auditor report be filed with the CSSF.
Liquidators shall also ensure that non-financial information, such as information on deposits in escrow at the Caisse de Consignation, monitoring of residual cash, or confirmations on closure of bank accounts are provided to the CSSF after the closing of the liquidation.
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