Luxembourg Funds Intelligence Briefing
9th September 2019
Topics
Asset Management
Regulation
Brexit

Experts have questioned the conclusions of a study by Marina Steininger of Germany’s ifo Institute that found that Luxembourg risked more economic damage than any country other than Ireland if the UK leaves the EU without a withdrawal agreement. According to Statec’s Ferdy Adam, slight variations in Luxembourg’s GDP this year, in 2020 and 2021 from a no-deal Brexit would be minimal – no more than 0.1%. Other experts acknowledge that it’s particular hard to measure the impact of national adjustment measures, the transfer of financial businesses to continental Europe and capital flows, which could evolve further in the coming months.

— Simon Gray, Editor in Chief

Asset Management
Luxembourg fund industry inflows influenced by Brexit and monetary easing prospects in July

The €4.48trn aggregate net assets of Luxembourg-domiciled UCITS, SIF and SICAR investment funds at the end of July represented an increase of 1.66% from €4.11trn a month earlier and of 4.72% over the previous 12 months. The CSSF says that of the current 3,829 Luxembourg-domiciled funds, 1,325 are single-portfolio structures and 2,504 are umbrella funds that contain a total of 13,494 sub-funds. The regulator says the month saw net inflows for bond funds but outflows for equity funds as a result of a combination of anxiety over Brexit and indications of monetary policy easing in Europe and North America.

Best source: Luxembourg Chronicle
See also: CSSF (in French)
Jupiter Asset Management commits to Luxembourg whatever Brexit outcome

UK fund management firm Jupiter Asset Management, which switched its fund offering for EU customers to Luxembourg a year ago to maintain access to the European market, says it will remain committed to the grand duchy regardless of the outcome of the UK’s Brexit negotiations. Luxembourg-domiciled Jupiter Asset Management International now has nine employees that support operations in six other EU countries, according to Maximilian Guenzl, head of the Luxembourg office. Jupiter had £45.9bn of assets under management globally at the end of June, including £11bn in its Luxembourg-domiciled Sicav range.

Best source: Delano
KBL epb recruits successor to group CIO Van Geyt

KBL European Private Bankers has appointed Bill Street as group chief investment officer in succession to Stefan Van Geyt, who is taking up the post of group head of investment products and services. Street, who was previously chief investment officer for Europe, the Middle East and Africa at State Street Global Advisors, will lead KBL epb's global asset allocation strategy. In his new role, Van Geyt will oversee a wide range of functions, including asset management and servicing, structured products, alternative investments, lending origination, and wealth planning and structuring.

Best source: KBL European Private Bankers
Regulation
CSSF reminds UK fund managers of September 15 notification deadline for post-Brexit plans

The CSSF has reminded UK fund providers that they must submit a notification by September 15 of their intention to continue trading in Luxembourg after Britain's scheduled departure from the EU on October 31. Asset managers failing to meet the deadline will be considered as third-country entities, leading to a loss of passporting rights and sanctions if they continue to sell or manage funds in the grand duchy after a no-deal Brexit.

Best source: Investment Europe
See also: Funds Europe
HMS Lux fined more than €200,000 for breaching market abuse rules

The CSSF has imposed two fines totalling more than €203,000 on HMS Lux, an investment adviser and broker, for non-compliance with EU market abuse rules. One penalty was for failing to comply with regulatory technical standards, the other for knowingly providing incomplete responses to the regulator's requests for information. HMS Lux has three months to appeal against the ruling.

Best source: Luxembourg Times (subscription required)
See also: Paperjam (in French)
Brexit
No-deal Brexit set to have insignificant economic impact on Luxembourg: Statec

A no-deal Brexit is unlikely to have a significant impact on Luxembourg's economy, despite the alarmist projections of some analysts, according to Statec. Management committee member Ferdy Adam says the organisation forecasts a slight additional boost to the grand duchy's GDP this year if Britain leaves the EU without a withdrawal agreement or transition period, followed by a slight reduction in 2020, but he says the variations would be of the order of one-tenth of a percentage point. Nicolas Mackel, CEL of Luxembourg for Finance, notes that the financial sector - the industry most exposed to Brexit risks - has been preparing since 2016, and that all groups active in both jurisdictions have put in place alternative operating structures.

Best source: Wort (in French)
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