Exploring Corporate Governance Around the World

By Allison Garrett, Senior Vice President for Academic Affairs at Oklahoma Christian University

Tuesday, November 07, 2006

Luxembourg's New Investment Fund Law

Ernst & Young has just issued a report explaining Luxembourg's new law that will allow investments by "informed investors." The report is here.

Luxembourg has always been an issuer-friendly place, and the new law should make it even more so. The Specialized Investment Fund Law will replace Luxembourg's 1991 institutional investor fund law. The new law will allow investment funds to be sold to "informed investors" and defines that term in a way that is very similar to the SEC's definition of an "accredited investor." Under the new law, an informed investor is one of the following:

1. an institutional investor;
2. a professional investor; or
3. any other investor who declares in writing that he is an informed investor and invests at least 125,000 euros or has a bank or finance professional certify that he can adequately understand the investment.

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