Systemic hosts a Directors’ liabilities event in Luxemburg with the participation of more than 50 Directors and other funds’ service

The first speaker to the podium was Monique Bachner, Founding Partner of Bachner Legal, well-known from her role on the Board of the Institut Luxembourgeois des Administrateurs, who outlined the responsibilities of a director of a Luxembourg entity. She highlighted how these responsibilities had changed with AIFMD implementation mentioning that this transition had been less dramatic in Luxembourg than some EU states such as the UK because of the well-established UCITS framework. Bachner outlined that in her view the most common offences sanctioned by the CSSF were breaches of administrative rules and that the CSSF are becoming increasingly dogmatic in their application of the rules.  Various sanctions were available to the CSSF including Warnings, Reprimands, Fines from €250 to €250,000, Prohibitions on regulated activities (temporary or permanent) and Prohibitions from acting as a director, manager or conducting person of regulated entity.

Antonio Thomas, Partner of The Management Plus group, focused on the different roles and skill sets of board members as well as tools that could be used to ensure the effective running of the Board. Tools highlighted included a Terms of Reference document which summarises the boards scope and responsibility versus other bodies such as the audit committee, Investment Managers, Valuations committee etc. Other tools included Directors service agreement for each member defining the scope of each director and comprehensive reporting by means of board packs; including intra board meeting reports, liquidity reports and monthly investment manager reports. He concluded that each director must have a clear understanding of their obligations, establish clear boundaries between the boards of the AIF and the AIFM, trying to anticipate crises and thus having an established procedure as to how to proceed when they occur.