EU securities watchdog ends probe into Luxembourg's oversight of funds

Following a probe into whether Luxembourg’s financial regulator violated EU rules regarding the supervision of a group investment funds, the European Union's Securities Watchdog will not take any further action, according to an email Reuters received.

Last year, the European Securities and Markets Authority said that it was investigating Luxembourg regulator CSSF's supervision of a group funds called LFP I SICAV.

In a follow up email dated December 14, 2021, ESMA stated that it would not open an investigation into a breach of EU law. This was partly based on "detailed confidential data from the CSSF including its most recent supervisory and/or enforcement activities".

CSSF did not respond immediately to a request for comment. ESMA will be closed during Easter holidays.

LFP I SICAV was a group of funds managed by Luxembourg Fund Partners. Many of them have since closed.

Columna Commodities Fund, a hedge fund that was one of the largest in the world, collapsed at the close of 2016.

LFP I SICAV's assets managed (AUM), totalled almost 400 million euros ($436.5million). The bulk of its investors came from pension and retirement savings accounts.

According to David Mapley who represents individual investors seeking cash, the fund's AUM currently stands at 20 million euros.

ESMA received a complaint from Mapley, which was seen by Reuters. It stated that the CSSF had not upheld the EU's MIFID II regulations regarding investor protection.

Mapley stated in an email statement that Thursday, "Investor disbelief continues to mount at the apparent regulatory whitewash,"

ESMA was notified of 196 complaints in 2020 about alleged violations of law by national regulators. However, none of these complaints has been accepted.