The activity of central administration of investment funds or vehicles comprises register, accounting and administrative functions. Those functions encompass, in particular, the following tasks:
- legal and fund management accounting services;
- customer inquiries;
- valuation and pricing, including tax returns;
- regulatory compliance monitoring;
- maintenance of unit-/shareholder register;
- distribution of income;
- unit/shares issue and redemptions;
- contract settlements (including certificate dispatch);
- record keeping.
A UCI or its IFM is not required to perform itself the tasks relating to the central administration function. It may indeed entrust the exercise of this function (or part of) to an authorised third party established in Luxembourg (a “service provider”) for the purpose of a more efficient conduct of its business.
For transparency purposes, the UCI prospectus discloses the name of the central administration.
A UCI or its IFM may delegate the central administration function, or part of, to one or several external service providers in Luxembourg. The division of tasks related to the duties of central administration must not result in an excessive fragmentation which renders the exercise of the coordination and general supervisory function difficult if not impossible or which unnecessarily increases costs by unjustified duplication or which is detrimental to the satisfactory performance of the central administration function.
Service providers must have the necessary infrastructure in Luxembourg i.e. sufficient human and technical means in order to accomplish the entirety of the tasks connected to the duties of central administration.
The service provider must hold the following license:
- Credit Institution
- Investment Firm
- Specialised PFS and Support PFS:
- Registrar agent (registrar agents are automatically authorised to perform the business of administrative agent of the financial sector and the business of client communication agent in in compliance with Article 25 of the Law of 5 April 1993 on the financial sector (“LFS”));
- Administrative agent of the financial sector (only for accounting and administrative functions in compliance with Article 29-2 of the LFS);
- Client communication agent (only for administrative functions in compliance with Article 29-1 of the LFS).
Credit institutions and investment firms must receive an administrative authorisation from the CSSF to act as central administration.
The central administration may also outsource certain tasks subject to the approval of the CSSF.