UNDERTAKING FOR COLLECTIVE INVESTMENT (UCI)
An Undertaking for Collective Investment (UCI) established under Part II of the Law of 2010 is an investment fund that does not meet the criteria set by the EU Directives to render it eligible for distribution in more than one EU Member State.
Following the latest review of the legislative framework for UCITS, the Luxembourg legislator adopted the Law of 17 December 2010, which is also the legal basis for non-UCITS. It provides that the Law of 20 December 2002, as amended, will be repealed with effect from 1 July 2012 (except Articles 127 and 129 which have already been repealed with effect from 1 January 2011). As from 1 July 2011, UCI other than UCITS are governed by the Law of 2010, unless they are governed by a specific law. Part II of the Law of 17 December 2010 relating to undertakings for collective investment. Circulars issued by the CSSF complement the regulatory framework by clarifying the implementation of different legal provisions governing the supervised entities. Moreover, the CSSF publishes prudential rules relating to specific activities and gives recommendations regarding financial activities. IML Circular n° 91/75 clarifying certain aspects of the UCI legal framework.
A UCI may take the legal form of a common fund (FCP - fonds commun de placement) or may be constituted as an open-ended investment company (SICAV - Société d'investissement à capital variable) or a closed-ended investment company (SICAF - Société d'investissement à capital fixe). The FCP has no legal personality and thus must be managed by a management company.
These different entities may be set up as a single fund or as an umbrella fund consisting of multiple compartments, each with a different investment policy. The fund and compartments may have an unlimited number of share classes, depending on the needs of the investors to whom the fund is distributed.
The net assets of an FCP may not be less than EUR 1.250.000 This minimum must be reached within a period of six months following its authorisation.
The minimum capital of a self-managed SICAV/SICAF may not be less than EUR 300.000 at the date of authorisation. The capital of any SICAV/SICAF must reach EUR 1.250.000 within a period of six months following its authorisation.
UCI ("Part II") funds do not benefit from a European passport.