Luxembourg loan origination funds and potential interactions with the Luxembourg financial sector law

This article by Ezechiel Havrenne, lecturer at the University of Luxembourg on Investment Funds, clears any potential misunderstanding on the scope of the Luxembourg financial sector law (the “FS Law”) - which aims at regulating namely loan origination, participation and acquisition activities - and potential interactions with some Luxembourg loan funds. With the aid of Directive 93/22/EEC - which is sometimes referred to as the “birth mother” of the general “exclusion” provisions contained in the FS Law - it is made clear that the FS Law not only excludes from its scope loan funds taking the form of Part II Funds, SICARs, SIFs and SVs but also RAIFs and any unregulated Luxembourg fund managed by a fully authorised AIFM. It also touches on relations between the FS Law and the EuVECA, EuSEF and ELTIF Regulations. Finally, it deals in a very pragmatic way with the intricacies of unregulated structures (including fund structures) which would be active in the lending space yet without being managed by a fully authorised AIFM or placed underneath a fund falling within the scope exceptions contained in the FS Law.

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