Article Post on 25 March 2020

Episode 1 - COVID-19 Webcast - Legal & Regulatory Developments

_This is the first episode of our COVID-19 webcast series. Partner Mark Shaw wants to start with a summary of the legal and regulatory developments affecting the Luxembourg market coming from the CSSF.

Transcription of the video:

So taking the CSSF first, it has taken a very hands-on and pastoral role for a financial regulator, directly acting as an additional arm of the government in protecting Luxembourg in the public health crisis.

It has come a long way from its Communique of 2 March - Saying that “the recourse to long-distance work should be possible under certain conditions” and that “a professional might decide to ask one or more of its employees to work from home.”

The latest Communique of 22 March moves its position to one where “the deployment of staff members to the usual workplace or backup site should be limited to vital functions that are essential … provided that these functions cannot be performed remotely”. The message being that remote working must be prioritised – prior authorisation of the CSSF is not required.

We’ll follow-up on the remote access and BCP issues in the next episode.

Swing Pricing

On 20 March the CSSF addressed the market volatility impact on swing pricing and its effect on Luxembourg UCIs (being UCITS, Part II Funds or SIFs).

Swing pricing is a mechanism for fund providers to adjust the net asset value of a fund, in order to pass on the costs of trading underlying securities to those that are buying or selling fund interests, to avoid the dilution of value for other investors.

Typically, where this is allowed, the prospectus sets limits on the extent to which this can be done.

Given the current exceptional market circumstances caused by COVID-19, The CSSF will permit the temporary increase of the swing factor beyond the maximum level set-out in the UCI’s prospectus.

Key points to note here are that (i) this decision must be duly justified and take into account the best interest of the investors; (ii) it must be communicated to existing and new investors; and (iii) the CSSF must be notified of the resolution with an explanation.


The CSSF itself remains operational, but for obvious reasons its offices are closed to external visits. All communication should be done either through the eDesk for those who have registered, or by e-mail. They are also available for meetings by telephone or videoconference.

If you are in any doubt as to how to handle the legal issues arising out of the COVID-19 pandemic, please do use our helpline or visit our COVID-19 toolkit.

In the next episode we will look at the regulatory developments coming from European Securities and Markets Authority

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