Financial Crime World

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Due Diligence Framework for Luxembourg Fund Industry

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The Association of the Luxembourg Fund Industry (ALFI) has developed a comprehensive framework for due diligence information packs related to the Luxembourg fund industry. This framework serves as a template or checklist for investors, asset managers, and other stakeholders to assess potential service providers in the sector.

Part I: General Information

  • Overview of the fund industry in Luxembourg
  • Key statistics and trends
  • Regulatory environment

Part II: Administrative Services

  • Fund administration services
  • Reporting and compliance services
  • Risk management and control

Part III: Custody and Sub-Custody Services

  • Custodial services for assets held in cash, securities, or other forms
  • Sub-custodial services for assets held outside of Luxembourg
  • Settlement and clearing services

Part IV: Investment Restrictions Monitoring

  • Compliance with investment restrictions
  • Monitoring of investment portfolios
  • Reporting to regulatory bodies

Part V: Other Items

  • Anti-money laundering (AML) and combating the financing of terrorism (CFT)
  • Data protection and confidentiality
  • Business continuity planning

Key Points

  • Comprehensive framework: The document provides a detailed framework for due diligence, covering various aspects of the Luxembourg fund industry.
  • Industry standards: ALFI is promoting high professional standards and quality products and services in the industry, aligning with best practices.
  • Regulatory compliance: The framework includes sections on regulatory compliance to ensure that service providers meet relevant regulations and directives.
  • Investor protection: By promoting transparency and good corporate governance, ALFI prioritizes investor protection and trust in the industry.

Conclusion

The due diligence framework developed by ALFI is a valuable resource for investors, asset managers, and other stakeholders in the Luxembourg fund industry. It provides a comprehensive checklist for assessing potential service providers and ensures that they meet high professional standards and regulatory requirements.