Luxembourg will shortly make a Q&A surrounding ETFs available to its members, the country’s fund association says, as momentum for active ETFs increases.
Describing itself as the largest hub for actively managed ETFs, the Luxembourg funds industry association, Alfi, is buoyed by a recent parliamentary move to exempt active ETFs from subscription tax, starting from 2025.
Alfi said this was one measure among others that will unlock opportunities with active ETFs and active ETF share classes.
Over the past few months, the Luxembourg investment fund industry has been collaborating closely with legislators and regulators to shape a number of initiatives aimed at enhancing Luxembourg’s attractiveness for ETFs, said Alfi.
On 19 December 2024, the financial regulator, CSSF, published a FAQ providing for the possibility to defer the disclosure of an active ETF portfolio composition. This information is required to be published at least on a monthly basis, with a maximum time lag of one month.
Calling this a “new transparency regime”, Alfi said it represented a “safe harbour” for actively managed ETF strategies.
Jean-Marc Goy, Chairperson of ALFI, said: “The new transparency and tax regime applicable to Luxembourg domiciled ETFs provides asset managers with a uniquely attractive framework in Europe. The active ETF market continues to grow rapidly, and Luxembourg, Europe’s largest cross-border investment fund domicile, is well-positioned to capitalise on this momentum.”
Jean-Marc Goy’s invitation from Luxembourg
Corinne Lamesch, deputy CEO, general counsel of ALFI added: “Luxembourg has a proven track record of launching active ETF share classes within existing Ucits funds. By adding active ETF share classes into tested Luxembourg active strategies, asset managers can diversify their distribution channels and expand their global market reach.”
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