Product and operational flexibility in Luxembourg

Product and operational flexibility in Luxembourg

Luxembourg is globally known for its dominant position in domiciliation and administration of UCITS funds. Since the implementation of the first UCITS Directive in 1988, it has established itself as the leader in UCITS fund administration and fund custody. The early embracement of the UCITS scheme has contributed to the creation of a pan-European and international distribution hub as 75% of worldwide mutual fund registrations were domiciled in Luxembourg.

The positioning of Luxembourg has led to the establishment of significant depth and expertise within the service provider community to support the complexities of internationally invested and distributed funds.

Within the generic value chain of the asset management industry, Luxembourg is positioned with a strong focus on backoffice tasks. However, the substance and governance requirements introduced by the UCITS III regulation have broadened the competencies of the Luxembourg service providers and management companies (e.g. Risk Management, distribution reporting, etc.). With UCITS IV and the new structures it allows, this well established sophistication in backoffice tasks comes as a true competitive advantage as compared to other domiciles.

Product and operational flexibility in Luxembourg

Some of the more common features of complex fund administration support/structuring that are readily seen in Luxembourg are summarised below. These solutions have evolved over time and are constantly being expanded to meet the needs of today’s fund providers.