On 12 February 2026, the Chambre des Députés adopted Bill n° 8628 transposing Directive (EU) 2024/927 into the AIFM Law of 12 July 2013. The law enters into force on 16 April 2026, with certain reporting provisions deferred to 16 April 2027, as expressly provided in Article 57.

• Loan Origination regime

Article 28 amends the definitions in Article 1 of the AIFM Law to introduce the new AIFMD II concepts that form the foundation of the revised framework. These include, in particular, the statutory definition of a loan originating AIF (FIA octroyant des prêts), now defined as an AIF whose investment strategy consists primarily in granting loans or for which the notional value of originated loans represents at least 50% of its NAV. Article 29 introduces Article 4 1 into the AIFM Law, establishing that loan originating AIFs may not grant or manage consumer loans in Luxembourg.

A new loan origination regime has been created under Article 35 amending Article 14. A borrower concentration limit is added under which the notional value of loans to a single borrower that is a financial undertaking (within the meaning of Solvency II Directive) must not exceed 20% of the AIF’s capital, with timing rules for compliance and temporary suspensions during capital changes (Article 14(5)–(7)).

New paragraph (8) caps leverage at 175% for open-ended and 300% for closed-ended loan funds, measured by the commitment method, and clarifies the treatment of committed facilities and the remediation of inadvertent breaches.

Paragraph (9) prohibits lending to the AIFM or its staff, to the depositary or its delegates, and to the AIFM’s delegates or their staff, subject to a narrow group financing carve-out. Paragraph (10) mandates full attribution of loan proceeds to the AIF and enhanced cost and fee transparency.

Paragraph (11) bans originate to distribute strategies where the purpose is solely to transfer loans, and paragraph (12) imposes a 5% risk retention requirement on any loan that is subsequently transferred, to be held until maturity for loans up to eight years or for consumer loans irrespective of tenor, and for at least eight years for other loans, with enumerated derogations and an obligation to justify reliance on any exception at CSSF request.

Article 36 inserts Article 15(3), which requires loan originating AIFs to be closed-ended unless the AIFM demonstrates that the fund’s liquidity risk management is compatible with its investment strategy and redemption policy. A transitional regime in Article 54(7) deems loan funds constituted before 15 April 2024 to comply with the new concentration, leverage and closed-endedness rules until 16 April 2029, subject to stabilisation — no increase of any leverage or concentration above the level at entry into force.

The definition of loan origination in AIFMD II includes the granting of a loan “indirectly through a third party or special purpose vehicle which originates a loan for or on behalf of the AIF, or for or on behalf of an AIFM in respect of the AIF, where the AIFM or AIF is involved in structuring the loan, or defining or pre-agreeing its characteristics, prior to gaining exposure to the loan”. This means for example that transactions where an AIF subscribes for financial instruments issued by a Luxembourg securitisation vehicle (and such AIF or the AIFM was involved in structuring the relevant underlying loan or defining or pre-agreeing its characteristics) may fall within the scope of the loan origination regime. This is regardless of whether the Luxembourg securitisation vehicle is itself an AIF, the determination of which is not affected by the amendments to the AIFM Law.

Finally, AIFMs are now required to take appropriate corrective measures where an AIF becomes exposed to a securitisation that no longer meets the requirements of Regulation (EU) 2017/2402, acting in the best interests of investors (Article 38 inserting Article 15-2).

• Liquidity Management tools & CSSF powers

AIFMs of open-ended AIFs are now required to preselect at least two liquidity management tools (LMTs) from the new Annex V (points 2–8), to establish detailed activation and deactivation procedures, and to notify the CSSF when suspensions or other tools are used outside the ordinary course (Article 37 inserting Article 15 1 of the AFM Law). Annex V, created by Article 56, enumerates the harmonised EU LMTs, including suspension, redemption gates, notice periods, redemption fees, swing pricing, dual pricing, anti-dilution levies, in kind redemptions and side pockets. Article 52 amends Article 50(2)(j) to grant the CSSF an explicit intervention power to compel activation or deactivation of suspensions in exceptional circumstances, with cross border information flows to host authorities, ESMA and, where appropriate, the ESRB governed by Article 53(6)–(11).

• Delegation and letter-box rules

AIFMs must now provide detailed role descriptions, clear reporting lines, time commitment metrics for persons who effectively conduct the business, and a complete mapping of all delegation and sub delegation arrangements, including the identity, location, regulatory status and functions of every delegate and sub delegate (Article 31(2) amending Article 6).

Prior notification to the CSSF is now required not only for the delegation of functions but also for the delegation of services (Article 39 amending Article 18). The AIFM must demonstrate that each delegate is capable of performing the delegated functions or providing the delegated services and must be able to objectively justify its entire delegation model. The revised letter box standard provides that an AIFM becomes a letter box where it delegates functions or services to such an extent that it can no longer be considered, in substance, the manager of the AIF for the purposes of Article 5(4). The new Article 18(3bis) confirms that the AIFM remains responsible for compliance with the AIFM Law irrespective of the delegate’s regulatory status, location or sub delegation chain.

• Governance and substance requirements

The two persons who effectively conduct the business of the AIFM must be natural persons working full time and domiciled in the EU (Article 32 amending Article 7(1)(c)). Article 34 inserts Article 13(2 bis), requiring AIFMs managing funds initiated by a third party (or using the initiator’s name) to evidence to the CSSF how conflicts of interest are prevented and managed, particularly where the initiator is also a delegate or otherwise involved in the fund’s operations.

• Additional AIFM services permitted

The list of services that an authorised AIFM may provide has been updated and expanded (Article 30 amending Article 5). In addition to portfolio and risk management, the article authorises AIFMs to administer benchmarks under Regulation (EU) 2016/1011 and to provide credit servicing activities under Directive (EU) 2021/2167.

• Depositary and CSD-related adjustments

Article 40(6) tightens third-country conditions by prohibiting depositaries located in jurisdictions listed as high risk under Article 9(2) of Directive (EU) 2015/849 or on the EU list of non-cooperative tax jurisdictions; if a jurisdiction becomes listed after appointment, the AIF must replace the depositary within an appropriate period not exceeding two years. Article 40(11) amends Article 19(11) to clarify that services provided by a CSD acting as issuer CSD do not amount to a delegation of safekeeping, whereas services by a CSD acting as investor CSD constitute delegation and therefore trigger the depositary’s selection, ongoing oversight and liability duties.

• Reporting and transparency

CSSF reporting has been aligned with ESMA for EU-wide cost data collection, complementing the cost transparency reforms introduced in Articles 41 and 42 (article 33 adjusting Article 11). Article 41 introduces additional cost transparency disclosures under Article 21, strengthening both pre-contractual and annual reporting obligations.

Article 42 amends Article 22 to require more granular supervisory reporting by AIFs, covering instruments traded, active markets, exposures and assets, the current risk profile (market, liquidity, counterparty and operational risks, and total leverage), the selection and use of liquidity tools including activation or deactivation events, stress test results, and detailed delegation data identifying delegates, locations, regulatory status, staffing (FTEs), scope and dates of delegation and sub delegation, and oversight outcomes. At ESMA’s request, the CSSF may impose additional reporting under Article 22(5).

Taken together, these changes have required AIFMs to reassess their operating models, in particular in relation to delegation frameworks, liquidity management and loan origination strategies, ahead of the 16 April 2026 application date.