Our Compliance Framework – A Deep Dive into the RAIF Structure

Luxembourg introduced the Reserved Alternative Investment Fund (RAIF) regime in 2016, which enables sophisticated investors to access a vehicle that enjoys rapid launch because direct Commission de Surveillance du Secteur Financier (CSSF) authorisation is not required. The model demands that an authorised Alternative Investment Fund Manager (AIFM) shoulders supervisory responsibility, which means that every RAIF remains plugged into the European passport created by the Alternative Investment Fund Managers Directive (AIFMD). (Mondaq)

Why the Framework Matters

Our firm sponsors several RAIFs that pursue diversified strategies, therefore a transparent compliance framework that integrates Luxembourg law with forthcoming European reforms promotes investor trust and operational resilience. The section below maps governance layers that our board has approved, which draw inspiration from CSSF Circular 24/856 on error-correction standards for collective investment vehicles, even though RAIFs sit outside direct CSSF oversight. (CSSF)

Pillar 1 – Authorised AIFM

Because a RAIF must be managed by an external AIFM that possesses a full licence under the AIFM Law, prudential supervision flows through that entity. The AIFM monitors leverage, liquidity, and valuation, and it files Annex IV reports throughout the Union. (Mondaq)

Pillar 2 – Board and Policies

Our boards adopt written policies that embed Circular 24/856 methodologies for NAV-error detection, investment-breach remediation, and investor compensation thresholds. Decision logs ensure that the board, which carries ultimate fiduciary duty, can evidence oversight during regulator reviews. (CSSF)

Pillar 3 – Depositary and Cash Control

A Luxembourg credit institution or investment-grade professional depositary holds financial instruments and verifies ownership of other assets. Reconciliation routines operate daily so that discrepancies trigger alerts to both the AIFM and the board.

Pillar 4 – Central Administration and Reporting

A supervised professional calculates the net asset value, updates the shareholder register, and produces the annual report in line with International Financial Reporting Standards because investors demand comparable data.

Pillar 5 – AML ⁄ CFT Governance

The Administration de l’Enregistrement, des Domaines et de la TVA (AED) expanded reporting obligations for the 2024 financial year, which means that our RAIFs submit an AML/CFT questionnaire, an RC report, and identification forms by 31 May 2025. The board appoints an RC and an RR that possess adequate expertise, and an annual risk assessment aligns procedures with Sixth Anti-Money-Laundering Directive expectations. (Goodwin Law)

Pillar 6 – Horizon Scanning under AIFMD II

The European Parliament adopted AIFMD II in 2024, and member states must transpose measures that strengthen delegation oversight, liquidity tools, and loan-origination limits by April 2026. Our compliance roadmap therefore schedules policy gaps reviews each quarter because early alignment facilitates passport renewals and investor marketing. (Mayer Brown)

Pillar 7 – Documentation and Investor Disclosure

Offering memoranda, partnership agreements, and marketing annexes incorporate RAIF-law references so that well-informed investors can verify eligibility. Updates follow a four-eye review process and version control that locks every change before distribution.

Putting the Framework into Practice

Because the RAIF structure removes direct CSSF pre-approval, a proactive compliance architecture becomes essential. The combination of an authorised AIFM, rigorous governance, and enhanced AML/CFT processes ensures that our funds can navigate evolving European standards while protecting investor interests and preserving market access.