Luxembourg adopts law transposing AIFMD II and UCITS VI
The Luxembourg law of 3 March 2026 transposing Directive (EU) 2024/927 amending Directives 2011/61/EU and 2009/65/EC (“AIFMD II” and “UCITS VI”) has been adopted by the Luxembourg Parliament on 12 February 2026 and has been published in the Official Journal on 9 March 2026.
As a result, the Luxembourg law of 17 December 2010 relating to undertakings for collective investment (the "UCI Law") and the Luxembourg law of 12 July 2013 on alternative investment fund managers (the "AIFM Law") have been amended to reflect the new EU framework, with implications for AIFMs, AIFs and UCITS.
The new law will generally enter into force on 16 April 2026 while certain enhanced supervisory reporting requirements will apply as from 16 April 2027. In addition, the law includes transitional and grandfathering provisions, notably in the context of loan-originating AIFs.
Loan-originating AIFs
The adopted law formally integrates into Luxembourg law the EU regime applicable to loan-originating AIFs. It introduces, amongst others, leverage limits of 175% for open-ended and 300% for closed-ended loan-originating AIFs, together with a risk-retention requirement in connection with loan transfers as well as a concentration limit in respect of certain types of borrowers.
Luxembourg has made use of the option to prohibit consumer lending by Luxembourg AIFs, without restricting compliant cross-border loan origination strategies or the acquisition of loan portfolios including consumer loans originated by third parties.
Liquidity management tools for open-ended AIFs and UCITS
Open-ended AIFs and UCITS are required to select liquidity management tools from the harmonised EU toolbox. The selected tools must be reflected in the fund’s documentation and supported by appropriate policies and procedures governing the activation and deactivation of these tools as well as the operational and administrative arrangements for their use.
Delegation
The law preserves existing delegation and sub-delegation structures while strengthening transparency and supervisory reporting requirements applicable to delegation arrangements. Distribution activities carried out by distributors acting in their own name are expressly clarified as not being automatically characterised as delegation.
Activities of AIFMs and UCITS management companies
The law clarifies and extends the scope of ancillary activities that may be carried out by AIFMs (loan origination on behalf of an AIF and servicing securitisation SPVs, benchmark administration, credit servicing activities and provision of services to third parties) and UCITS management companies (reception and transmission of orders, benchmark administration and, provision of services to third parties).
Contributions in kind (relevant for UCITS SICAVs only)
For UCITS SICAVs, the law removes the requirement to prepare an auditor report in respect of a contribution in kind.
For further background on the legislation and the underlying policy considerations, please refer to our earlier Ashurst publication, available here.
For more details, feel free to contact our Luxembourg Investment team.
