Luxembourg gold-plates AIFMD reporting guidelines

The popular fund domicile will ask GPs to regularly submit more information than what the directive requires.

Luxembourg’s securities regulator, the CSSF, has gone above and beyond the Alternative Investment Fund Managers Directive (AIFMD) reporting guidelines' requirements.

The CSSF will require fund managers to disclose their funds’ liquidity profiles, how funds measures risk, exactly how much leverage funds carry, and the number of transactions carried out using high-frequency algorithmic trading techniques.

These requirements are not explicitly set out in the directive but in October pan-EU regulator, the European Securities and Markets Authority's (ESMA), asked its national counterparts to consider adding these disclosures to their reporting frameworks.

Legal experts expect most – if not all – national regulators to follow ESMA’s guidelines. “ESMA is telling the other regulators that it thinks strongly that this other information should be collected because they feel it’s relevant,” one regulatory lawyer told PE Manager.

“ESMA actually put the boxes in its reporting template for regulators to collect this data too. My expectation is that it will very much be standard across Europe.”

At the time of ESMA’s guidelines the industry was worried these requirements would be an unnecessary burden, arguing that relatively few GPs leverage their funds and hardly any engage in high-frequency trading, making these types of disclosures of little value to regulators.

The CSSF also set out the technical details of how fund managers must file their AIFMD reports. The regulator requires GPs to report their Annex IV reports using either the Luxembourg stock exchange’s financial reporting platform “e-file” or file transfer system “SOFIE”. The CSSF requires the reports to be filed in English only.

Luxembourg set January 31, 2015 as a deadline for annual filers and also for semi-annual filers. Fund managers filing quarterly reports must submit their information by October 31, 2014.