Fund director in Luxembourg, vehicle governance and substance.
A fund director sits on the board of a Luxembourg investment vehicle and oversees its governance and substance, in liaison with the manager (AIFM / management company). FSL provides directors and operational governance; the approval of fund officers is the CSSF's remit (fit & proper) and legal opinions are coordinated with our partner lawyers.
A fund director is a board member of an investment vehicle (RAIF, SCSp, SICAV-SIF, SICAR) or of its general partner. They contribute to governance, oversight of delegates and documentation of decisions. For regulated structures, officers are subject to the CSSF's fit & proper assessment.
Governance of vehicles managed by an authorised manager is framed by the AIFM law of 12 July 2013 and CSSF circular 18/698 (governance and substance of IFMs). The director function is governed by the law of 10 August 1915.
Key takeaway
- A fund director exercises genuine oversight of delegates.
- Governance follows the AIFM law and CSSF circular 18/698.
- Approval of officers of regulated structures is the CSSF's remit.
Fund director: on the vehicle board or on the manager's board?
The question looks technical. It in fact determines the entire applicable regime, and it is the most expensive confusion we encounter in structuring projects.
Sitting on the board of an investment vehicle (RAIF, SICAV-SIF, SICAR, or the general partner of an SCSp) is a company-law function. The board approves the accounts, the offering documentation and the valuation policy, and oversees delegates. Depending on the vehicle's regime, the CSSF approves the appointment, is merely informed of it, or does not intervene at all.
Being a conducting officer of an authorised manager is a different matter. The conducting officers of an AIFM or a management company effectively run the regulated business day to day. They face strict requirements on time commitment, location and accumulation of mandates, and their appointment goes through prior CSSF approval.
FSL provides director mandates. Conducting officer functions within the meaning of article 7 of the AIFM law belong to another profession: the requirements described below are set out as context, to place the board within the wider framework. Operational support to the manager is covered on the AIFM and ManCo support page.
What the law of 3 March 2026 changed for AIFM conducting officers
The law of 3 March 2026 transposes Directive (EU) 2024/927, known as AIFMD II, and entered into force on 16 April 2026. It is the most significant framework revision since 2013 for the governance of Luxembourg managers.
Article 7(1)(c) of the AIFM law, as amended, now expressly requires at least two natural persons conducting the business, employed full time and domiciled in the European Union. Both conditions previously belonged to supervisory practice; they now sit in the law itself.
Luxembourg parliamentary commentary presents the requirement as a codification of existing CSSF practice, which limits its effect for managers already aligned with circular 18/698. For structures relying on officers domiciled outside the Union, by contrast, the issue is real and immediate.
The enhanced reporting obligations under the same text only apply from 16 April 2027, leaving a year to adapt data collection arrangements.
How many mandates can be held? The real thresholds in CSSF circular 18/698
This is the most frequently asked question, and the one carrying the most approximate figures. CSSF circular 18/698 sets precise benchmarks for members of managers' governing bodies.
Two thresholds act as triggers, at point 69: 1,920 hours per year across all mandates, and 20 mandates. They are not absolute caps, contrary to what is often claimed. Exceeding them requires justifying to the CSSF that the person has the necessary time, which point 71 expressly contemplates.
Point 70 further accepts that mandates held across structures showing synergies may be assessed together rather than one by one. The logic of the text is effective availability, not mechanical counting.
Conducting officers in the strict sense face a harder regime: permanent location in Luxembourg in principle (point 79), one full-time equivalent each (point 80), and above EUR 1.5 billion of assets under management, no other conducting officer mandate and both officers located in Luxembourg (point 82). Below that threshold, point 81 opens a derogation covering a maximum of two mandates.
Approval, notification or nothing: the regime follows the vehicle
There is no single approval rule for a fund director. The regime depends on the vehicle, and the gap between the extremes is considerable.
For an authorised manager, point 104 of CSSF circular 18/698 requires prior notification to the CSSF for approval, before any appointment. Point 105 lists the expected documents, notably the curriculum vitae, criminal record extract, declaration of honour and list of mandates held.
For a SIF, article 42(3) of the law of 13 February 2007 provides for CSSF approval. For a Part II UCI or a UCITS, article 27(1) of the law of 17 December 2010 requires communication forthwith: an information duty, not an authorisation. For a RAIF, article 2(2) of the law of 23 July 2016 expressly disapplies the good-repute conditions to the vehicle's directors, scrutiny concentrating on the authorised manager instead.
A continuing obligation applies on the manager side: point 107 requires an annual update of the list of mandates, within five months of the financial year end. It is a calendar deadline, and a regularly missed one. Vehicle regimes are detailed on the RAIF and SCSp pages.
What a fund board should actually be monitoring in 2026
A fund board does not manage, it oversees. The quality of a mandate is measured by the capacity to usefully challenge the work of delegates: manager, central administration, depositary, valuer.
Two topics structure the 2026 oversight agenda. Liquidity management tools first: CSSF circular 26/910 of 15 April 2026 sets out the framework, and both the selection and the activation of these tools are decisions that reach the board.
Delegation second. The supervisory priorities published by the CSSF on 31 March 2026 announce a thematic data collection on risk management functions in the second half of 2026, together with a review of delegation arrangements against circular 18/698. A board without structured reporting from its delegates will struggle with that exercise.
Board composition is itself framed on the manager side: at least three members at point 59, and no majority of executive members at point 64. That second rule is the concrete expression of a simple idea, a board must be able to contradict management. The full service chain is presented on the fund services page.
Appointing an officer: what each regime requires
| Vehicle or entity | CSSF involvement | Basis |
|---|---|---|
| Authorised manager (AIFM, management company) | Prior notification for approval, before appointment | CSSF circular 18/698, point 104 |
| Specialised investment fund (SIF) | CSSF approval | Law of 13 February 2007, article 42(3) |
| Part II UCI and UCITS | Communication forthwith, an information duty | Law of 17 December 2010, article 27(1) |
| Reserved alternative investment fund (RAIF) | None, the good-repute conditions do not apply to the vehicle's directors | Law of 23 July 2016, article 2(2) |
| SOPARFI or unregulated vehicle | None | Amended law of 10 August 1915 |
Who this is for
- Promoters of RAIFs, SCSps and alternative funds
- General partners of fund structures
- Management companies and AIFMs seeking directors
- Institutional investors requiring demonstrable governance
What we do
- Director mandate on the fund or GP board
- Oversight of delegates (AIFM, administration, depositary)
- Documentation of decisions and boards held in Luxembourg
- Coordination with AIFM / management company support
- Contribution to substance and the control framework
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Frequently asked questions
What is a fund director?
What is the difference between a fund director and a conducting officer of the manager?
How many mandates can a director hold?
Does the CSSF have to approve the appointment of a RAIF director?
What did the law of 3 March 2026 change for managers?
Is approval required to be a fund officer?
How does this differ from a SOPARFI director?
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