Circular Letter C2.10-0539 — Application of the reporting threshold for OPCs commencing their activities

2, boulevard Royal L-2983 Luxembourg Fax (+352) 4774-4920 E-mail: reporting.opc@bcl.lu ./.

Ref.: C2.10-0539 Luxembourg, May 28, 2010

To all money market and non-money market investment funds

Subject: Application of the reporting threshold for investment funds commencing their activities

Dear Sirs, Madams,

We refer to circular letters BCL 2007/211 and BCL 2009/227, through which we informed investment funds of the principles of statistical collection from money market and non-money market investment funds, as well as to circular letter C2.09-0842 regarding the application of exemption thresholds for collection.

In this context, we have observed that applying exemption thresholds for investment funds starting their activities with a net asset value (NAV) above the threshold presented significant disadvantages for transaction statistics. Indeed, when setting up new reports, transaction collection was avoided to not increase the reporting burden on investment funds. However, deriving transactions from positions provides statistically correct results if the following conditions are met:

• Timely transmission of reports with quality information,
• Continuity in the reports produced; a single error can indeed lead to aberrant transactions,
• Transmission of reports from the beginning of activity when the NAV at the start of activity is above the threshold.

2, boulevard Royal L-2983 Luxembourg Fax (+352) 4774-4920 E-mail: reporting.opc@bcl.lu ./.

Thus, in order to guarantee the quality of transaction derivation from positions, investment funds that begin their activities with a NAV above the threshold do not benefit from the application of the exemption threshold and are required to transmit reports from the start of their activities.

The update of the BCL database regarding the mandatory nature of report transmission can only be carried out after receipt of the first O 1.1 report. Furthermore, in the absence of information on investment policy, investment funds are classified in the "Others" category, whose exemption threshold is 20 million euros.

Thus, the BCL will inform central administrations of the reports to be submitted by each investment fund commencing its activities as soon as it has the necessary information.

We therefore ask you to take the necessary measures immediately to enable you to comply with the changes described above.

In this context, for certain investment funds that began their activities after December 2008 with a NAV significantly above the threshold, the BCL will request the transmission of initial activity reports. Although the transmission of these reports was not mandatory, we must emphasize the importance that investment funds submit these reports for the establishment of statistics.

Please accept, Sirs, Madams, the assurance of our perfect consideration.

BANQUE CENTRALE DU LUXEMBOURG

Philippe Arondel Roland Nockels