LU - CSSF updates Q&A in the context of US T+1 moce
With effect from end of May 2024, most securities transactions in the United States, as well as in Canada and Mexico, have moved from a standard settlement cycle of T+2 to T+1. The applicable settlement cycles and related developments have an impact on the operations of UCITS and other investment funds.
The CSSF acknowledges that UCITS might under certain exceptional circumstances face temporary breaches of investment restrictions that could reasonably not be avoided (so-called “passive breach”).
Such passive breaches should, in principle, resolve themselves upon final settlement of the fund dealings or securities transactions. In case of a non-compliance qualifying as beyond the control, UCITS have, in accordance with Article 49(2) of the 2010 Law, to adopt as a priority objective for its sales transactions the remedying of that situation, taking due account of the interests of its investors. The CSSF expects UCITS to be able to justify the “passive” character of breaches. Cases of active non-compliance as a result of timing gaps in settlement cycles have to be dealt with and corrected in accordance with the provisions of Circular CSSF 02/77.