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Luxembourg Client Briefing: Circular CSSF 21/790 – self-assessment for UCITS, part II funds, SIFs and SICARs; management letter; separate audit report

The Commission de Surveillance du Secteur Financier (CSSF) has issued Circular CSSF 21/790[1] (the Circular) which concerns all Luxembourg authorised investment funds[2] (the Addressees) and their Luxembourg authorised auditor (réviseur d’entreprises agréé – REA). The Circular defines three supervisory tools that are described hereafter.

  • A self-assessment questionnaire: Addressees must submit a self-assessment questionnaire form (SAQ) to the CSSF for each financial year.
  • A separate audit report: The Luxembourg REA has to issue a separate report to the Addressee (rapport distinct - the Separate Report) to verify the Addressee’s replies to the SAQ. The Addressee must transmit the Separate Report to the CSSF.
  • A management letter: The REA of the Addressees must produce a management letter (lettre de recommendations – Management Letter) or a confirmation that the REA has no comments (the No Comment ML).

The SAQ, Separate Report and Management Letter/No Comment ML have to be submitted to the CSSF after the end of the financial year of the Addressee within a certain time frame, please see the table below.

  SAQ Separate Report Management Letter/No Comment ML)
UCITS 3 months 5 months 4 months
Part II Funds 4 months 6 months 6 months
SIF 4 months 6 months 6 months
SICAR 4 months 6 months 6 months

Furthermore, the Circular requires that the Addressees proactively follow-up with the CSSF in cases where the REA issues a so-called modified opinion (a Modified Opinion)[3]. Addressees must send a letter to the CSSF within one month of the publication of their annual report (the Follow-Up Letter).

Also, the Circular specifies the practical rules for the engagement of the REA.

Entry into force in two steps: The Circular applies in relation to financial years ending on or after 30 June 2022, however SIFs and SICARs have to submit the Separate Report to the CSSF only for financial years ending on or after 30 June 2023. Circular CSSF 02/81 and Chapter P of Circular IML 91/75 will cease to apply correspondingly.

If an Addressee’s CSSF authorisation ends, the deadlines for submitting the SAQ and the Separate Report apply from the date of the end of the authorisation.

More about the SAQ

The content of the SAQ depends on the scope of licence of the Addressee. The Addressees shall self-assess their compliance with the legal and regulatory requirements applying to them. The SAQ contains no questions on AML/CFT. This topic is covered inter alia via Circular CSSF 21/788.

The SAQ must only be submitted after it has been reviewed and validated by the responsible persons of the Addressee[4] (the Responsible Persons). Accordingly, the Responsible Persons shall establish adequate processes within the Addressee to make sure that they receive all necessary information to respond to the SAQ in due time.

More about the Management Letter

The Management Letter form is made available to the REA by the CSSF via eDesk. The Circular requires that the Management Letter must take into account, at least, the following (the Findings):

“- an important weakness or a point needing improvement communicated to whom it concerns in accordance with:

  • ISA 260 “Communication with those charged with governance”;
  • ISA 265 “Communicating deficiencies in internal control to those charged with governance and management”;

- any other weakness or point needing improvement which, based on the professional judgement of the REA, is of sufficient importance to be brought to the attention of the Responsible Persons or the CSSF.”

The Management Letter must also follow up on any Findings of previous financial years that have not been closed. The Responsible Persons must comment on any Findings and include in particular:

“- a detailed explanation of the reasons and circumstances related to the occurrence of the weakness or point needing improvement raised by the REA;

- a detailed explanation of the measures taken or decided in order to remedy the weakness or point needing improvement and to prevent their recurrence in the future. These measures must be accompanied by a detailed remediation plan and a related timetable”.

If the Responsible Persons do not respond to the REA and/or do not take remedial action in relation to Findings in a timely manner, the REA shall mention in the Management Letter that the REA did not receive comments on the Findings from the Responsible Persons.

More about the Separate Report

The REA must complete the Separate Report via eDesk. To verify the Addressees’ responses to the SAQ, the CSSF has defined a series of procedures in the Separate Report that must be completed by the REA. The results of the procedures are answers to “mainly closed-ended questions and they do not result in an opinion” in accordance with auditing or other standards.

More about the Follow-up Letter

The Follow-Up Letter must explain the underlying reasons for the Modified Opinion, its impact on the UCI and its investors, as well as the corrective measures taken by the Responsible Persons. The Follow-Up Letter must also state the timeline for the implementation of the corrective measures. The Follow-Up Letter has to be signed by the Responsible Persons and it has to be sent to the email address together with all supporting information and documents.

More about the rules concerning the Engagement of the REA

The Circular reiterates that the Addressee or the REA has to inform the CSSF in writing in case of a dismissal or resignation of the REA during the term of the REA’s appointment. Thereby an adaequate explanation for the dismissal or resignation has to be provided.

For each request to change the REA, the CSSF will analyse the reasons for the envisaged change and will assess whether, when selecting a new REA, the UCI has carefully assessed the adequacy of the competences and resources of the new REA considering the type and volume of the UCI’s activities


The Circular reminds that general requirements about filings via the CSSF’s eDesk portal are set out in Circular CSSF 19/721 and that a general user guide is available to Addressees and REA on the eDesk portal.

Procedures and explanations on preparing the SAQ, the Separate Report and the Management Letter are provided on the CSSF’s eDesk portal under the heading “Investment funds and vehicles / Investment fund managers” in the “Collective Investment Sector Reporting Tool” box.

For the financial years ending on or after 30 June 2022, the rules for the transmission of management letters according to Circular CSSF 19/708 will cease to apply.

[1] Circular CSSF 21/789 of 17 December 2021: Practical rules concerning the self-assessment questionnaire to be submitted annually by Luxembourg undertakings for collective investment. Engagement of the réviseurs d'entreprises agréés (approved statutory auditors) of Luxembourg undertakings for collective investment and practical rules concerning the management letter and the separate report to be drawn up annually
[2] The Circular applies to undertakings for collective investment (UCI) under  the law of 17 December 2010 on undertakings for collective investment (the 2010 Law) and governed by part I of the 2010 Law (UCITS) or by part II of the 2010 Law (Part II Funds), the law of 13 February 2007 on specialised investment funds (SIF) and the law of 15 April 2014 in investment companies in risk capital (SICAR).
[3] A Modified Opinion is a qualified opinion, an adverse opinion or a disclaimer opinion. The Circular specifies that matter paragraphs and information paragraphes are not Modified Opinions.
[4] Responsible persons means executives (“dirigeants”) of UCI.

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