Agefi Luxembourg - mai 2024

Mai 2024 3 AGEFI Luxembourg Banque privée / Economie Continuedpage 1 Special investment fund (SIFs) and reserved alternativeinvestmentfunds(RAIFs)areless likelytobeauthorizedformarketingtoretail investors on a cross-border basis as they are limitedtowell-informedinvestorsinLuxem- bourgandwouldhavedifficultydemonstrat- ing equivalence to retail-suitableAIFs. While targeting retail in- vestors underArticle 43 of thealternativeinvestment fund managers directive (AIFMD) remains challeng- ing,most EUmember states offer the possibilityof target- ing affluent investors without having to request specific autho- rization. For instance, following a marketingpassport notification target- ingprofessionalinvestorsinDenmarkandItaly, AIFMsmay,undercertainconditions,solicitthosein- vestorstoinvestatleast€100,000.AndinSlovakia,for example, thisminimumsubscriptionamount is even lower—at €50,000. In most cases, these types of in- vestorscouldbetargetedregardlessoftheinvestment vehicle’s structure. Itisworthnotingthataffluentinvestorsremainretail investors, as defined by theMarkets in Financial In- struments Directive (MiFID) (unless they have re- quested to be considered as professional investors instead).Thereforetheymustbeprovidedwithakey information document (KID) as well as facilities for investors (albeit on a remote basis). There may also beadditionallocalrulesonthedisseminationofmar- ketingcommunicationswhen targetingnon-profes- sional investors. TrendingProducts Europeanlong-terminvestmentfunds,orELTIFs,aim toaddressretailinvestors’growingdemandforalter- native assets while providing a harmonized frame- workfordistribution.ELTIFsbenefitfromtheAIFMD marketing passport, which allows them not only to be marketed to professional investors but also retail investors; this is currently the only kind of AIF with this type of permission. The objectives of ELTIFs, launched in 2015, were to provide long-termfinance for infrastructure projects, unlisted companies, or equity and debt financing to listed small- and medium-sized enterprises. ELTIFs allowretail investors access to these asset classes and providesthemanalternativetoUndertakingsforCol- lectiveInvestmentinTransferableSecurities(UCITS), which are constrained in the types of assets they can include in their portfolios. Amendments to the ELTIF Regulation, known as ELTIF 2.0, came into force in January 2024with the hope of removing some barriers that were previ- ouslyhindering this promisingproduct frombeing a success. Its launch introduced greater flexibility in the eligible investments, portfolio composition and borrowing limits. ELTIF 2.0 also aligned with MiFIDon the investor protection framework to in- clude suitability assessments, as previouslyELTIFs were employing their own. ELTIF 2.0 alsodropped the minimum subscription amount. Moreover,AIFMswere previously required topro- vide local facilities to investors when marketing to retail investors, pursuant to the ELTIF Regulation. The revisedELTIFRegulationhas removed this re- quirement, aligning insteadwith theAIFMDwhich does not requireAIFMs tohave aphysical presence in the host Member State. While creating new sourcing opportunities for man- agers, getting “ELTIF-ready” may come with its op- erational challenges for AIFMs who have not been previously active in the retailmarket, requiring them to set up their distribution networks. Such hurdles, however, appear to be the price to pay as European markets witness a transformation spurred by evolv- ing investment preferences. A significant trend gaining momentum is the pop- ularity of active exchange-traded funds (ETFs), es- pecially in the fixed income sector, which has been exploredduring theConference’spanel: “Bonds are back – why has fixed income returned to favour?” These investment vehicles, which have the appeal of discretionarymanagement embeddedwithin the known structureof ETFs, cater to the risingdemand for customized and actively managed investment products. This follows the trend in the UnitedStates,where activeETFs are see- ing higher net flows. While the Luxembourg Government has promised toaddress taxation reliefs for activeETFs to ensure the country re- mainscompetitiveandattractivefortheir establishment. ELTIFs also seem to be piquing the interest of investors beyond the European borders; we have observed a rising interest in distributing ELTIFs in non-EU coun- tries, such as in Latin America and the Middle East. Japanese fund man- agers are also exploring the possi- bility of creating local feeder funds to market ELTIFs tohigh-net-worth individuals. Reachingbeyond the EU ThelandscapeofLuxembourgfundsisdynamic,with opportunities emerging beyond European borders. Particularlynoteworthyisthegrowingsignificanceof theAsianmarketinLuxembourgfunds’cross-border distribution,whichcurrentlyrankssecondonaglobal scale, just after Europe. While regional passporting initiatives aimed at pro- moting cross-border fund distribution within the Asia-Pacificregion(APAC)havehadlimitedmomen- tum, Luxembourg funds have gained considerable traction,particularlyinAsia.Thisisstrikinglyevident in Hong Kong where, as of the end of 2023, Luxem- bourg-domiciledfundsheld75%oftotalassetsunder management,acrossbothdomesticandforeignfunds, marking a 6% increase from the prior year.A similar growthtrendisobservedinSingaporeaswellwhere, as of April 2024, 75% of foreign retail registrations werewithLuxembourg-based funds. ExpandingbeyondSingaporeandHongKong,inter- nationalassetmanagersarealsostrategicallymarket- ing their European flagship funds in South Korea, Taiwan, Macao, and Japan. Moreover, in Thailand and Indonesia, local fund structures are being estab- lished to facilitate investments inLuxembourg-based funds.Receptivetothisgrowinginterest,Deloittehas publishedaguidedesignedspecificallyforassetman- agers seeking to venture into the intricate landscape ofAsianmarkets. The thirdeditionof NavigatingAsia canbe downloadedhere, https://lc.cx/gjUfpM . Turning our gaze to LatinAmerica, the influence of private pension funds cannot be underestimated, particularly in countries such as Chile, Peru, Colom- bia,andMexico.Forexample,inChile,theComision Clasificadora de Riesgos (CCR, Risk Rating Com- mission) reports that 72% of foreign funds allowed for pension fund investment are domiciled in Lux- embourg. Restrictions on public marketing of these fundsmaylimitsalesopportunities,butitisapparent thatlocalretailinvestorsarefindingalternatives,such as domestically listedpassive ETFs, appealing. Preparing for the fund industry’s future These times present both opportunities and chal- lenges for Luxembourg-domiciled funds: Will alter- native and real assets meet expectations? In what waysareELTIFsmeetingthegrowingdemandforal- ternativeinvestments?Howistechnologytransform- ing retail investment? As industry stakeholders continue to unravel these dynamics, the potential for innovationisbothexcitingandlimitless.Wehopethe insights revealed at our 12th Cross-Border Distribu- tionConferencewillguidefurtheradaptationandad- vancement,sothatLuxembourgcancontinuetolead from the front and inspire a new era of growth and prosperity in this sector. JustinGRIFFITHS(portrait),Partner, GuillaumeSCAFFE(portrait),Partner, DorianeHARDY,Manager, Deloitte Thriving beyond borders: The evolving dynamics of Luxembourg funds E n date du 25 avril 2024, le gouverne- ment a transmis l'édition 2024 du Pro- gramme de stabilité et de croissance (PSC) et du Programme national de ré- forme (PNR) à la Commission européenne et au Conseil de l'UE. Cette démarche s'in- scrit dans le cadre du semestre européen, cycle de coordination des politiques économiques, budgétaires, sociales et du travail au sein de l'Union européenne (UE). Le PSC et le PNR ont fait l'objet d'une présentation aux partenaires sociaux le 15 avril 2024, conjointe- ment par leministre des Finances, Gilles Roth, et le ministre de l'Économie, des PME, de l'Énergie et du Tourisme, LexDelles, enprésence duPremiermin- istre, Luc Frieden. Les deuxprogrammes ont égale- ment été présentés dans le cadre des débats budgétaires à la Chambre des députés, qui se sont tenus du 23 au 25 avril 2024. Les données du PSC pour la période sous revue reposent entièrement sur celles présentées dans le projet de budget de l'É- tat pour 2024. Dans un contexte de crise économique, le solde des administrations publiques se chiffre à -0,7%duPIB en 2023. Endépit des efforts dunouveaugouverne- ment pour contenir la croissance des dépenses, le solde des administrations publiques atteindrait en 2024 un déficit de 1,2% du PIB, soit une améliora- tion de 1,5 point de pourcentage par rapport aux données présentées à l'automne 2023. Le déficit devrait se réduire à moyen terme et passer à -0,9% du PIB dès 2026. La dette publique devrait s'établir à environ 26,5% du PIB en 2024, pour ensuite se stabiliser autour de 27%du PIB. Le PNR décrit l'éventail des stratégies nationales visant à poser les jalons de la transition verte, numérique et inclusive au regard des défis auxquels lepays est confronté. Il intègreun chapitre concernant l'état actuel de lamise enœuvre des ré- formes et investissements inclus dans le cadre du Plan pour la reprise et la résilience (PRR) national, préparé par le ministère des Finances. En outre, le PNR regroupe des informations con- cernant des projets de réformes ou d'investisse- ments et les réponses politiques aux majeurs défis économiques, sociaux et de l'emploi identifiés dans le cadre des recommandations spécifiques par pays 2023-2024. Au vu de l'adoption de la réforme des règles budgétaires de l'UE par le Parlement européen, il s'agit ainsi des derniers PSC et PNR sous leur forme actuelle. Source : ministère des Finances / ministère de l'Économie Dernières éditions pour le PSC et le PNR Master the Maze of Pillar Two: Unravel Accounting Complexities -2Ζ1 86 21 b-81( $7 $0 Learn how to navigate the complexities of Pillar Two at our upcoming webinar. Master the ins and outs of the “consolidation test” for scoping assessments. Sharpen your accounting skills for adjusting GloBE income, understand the accountant’s role in top-up tax, deferred taxes, and identify the most suitable accounting framework. Moreover, the webinar provides focused insights into Lux GAAP & IFRS disclosures. Don’t miss this unique opportunity to gain valuable insights from our experts. ©2024DeloitteTax&Consulting,SARL 6&$1 0( 72 5(*Ζ67(5