FAQ_Law_17_December_2010_200624.pdf

Here are the key points summarized in English:

Treatment of breaches of the UCITS global exposure limit

• Passive breaches (beyond the control of the UCITS) do not need to be notified to the CSSF.
• Breaches of the VaR limit due to increased market volatility can be considered passive breaches.

Passive breach expectations

• Investment fund managers should take steps to meet the limit within a reasonable time period, considering market conditions and investor interests.
• Closely monitor the UCITS situation and define a remediation plan.
• Additional risk exposure taken by the UCITS after a passive breach can be viewed as an active investment breach.

Active breach notification

• If a UCITS breaches the VaR limit (either maximum regulatory limit or internal prospectus limit), it must notify the CSSF with the following information:
  • Legal name and CSSF identifier of the notifying entity
  • Legal name and CSSF code of the fund and sub-fund
  • VaR computation method and internal limit (if applicable)
  • VaR limit consumption, breach date, and end date
  • Reason for the breach

Note: The notification does not require the standard form in accordance with Circular CSSF 02/77.