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Luxembourg
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by the board of directors”.
4
The powers of
conducting officers under the fund-specific
legislation seem to go beyond the limits of
the concept of daily management.
Alternatives to such delegation of daily
management, i.e. the appointment of
conducting officers as directors or agents of
the company or its board of directors, did not
constitute viable options either. The former
due to potential conflicts of interest and thus
incompatibility with regulatory standards,
the latter due to its impracticality in dealings
with third parties. Moreover, both alternatives
created more risks for the board of directors,
which could be held ultimately liable for
the errors or negligence committed by the
conducting officers as directors or agents.
The Company Law Reform should fill in the gap
that existed between company law and fund-
specific legislation. The management committee
under the Company Law Reform seems to be
fully in line with the regulatory concept.
Luxembourg management companies and
AIFMs would now have an option — or,
depending on the view of the Luxembourg
Commission de Surveillance du Secteur
Financier (CSSF) of this issue, an obligation
— to establish management committees.
The conditions under which members of the
management committee may be appointed,
dismissed, remunerated and may carry out their
duties, as well as the mode of operation of the
management committee, shall be set out in the
articles of association or, in the absence of any
provision in the articles of association, by the
board of directors.
Similarly, the articles of association may confer
representation of the power on one or more
members of the management committee, acting
alone or jointly.
Now that the regulatory concept has found
its equivalent in corporate law, it would
be interesting to see whether the CSSF
could systematically require management
committees to be set up for each management
company or AIFM.
Management by legal entities
Legal entities are not barred from managing
Luxembourg companies. In this respect,
the Company Law Reform provides
important clarification.