The Luxembourg Financial Supervisor finally - but disappointingly - reports on closet index funds

A year and a half after ESMA asked CSSF (the Luxembourg supervisor) to investigate the potential cases of closet indexing (falsely active funds) it identified in Luxembourg. Many months after its colleagues from other important fund domiciles such as the UK, France and Germany had completed - and reported - on their own investigations, CSSF published its weak conclusions on the 28th of July.CSSF found only one closet indew funds, it does not disclose what is its definition of "closet indexing" and CSSF does implicitly and very vaguely acknowledge however that "some" funds violate disclosure rules on benchmarks.

• Read online
• Download