Luxembourg Fund Governance Survey 2022: AML And ESG Top Of The Agenda

PwC and ILA release 11th edition of Luxembourg Fund Governance Survey (© PwC/ILA)

Every two years, PwC Luxembourg and the Institut Luxembourgeois des Administrateurs (ILA) release the findings gathered from the boards of over 100 investment funds and management companies. Here are some key insights from the 11th edition survey.

Good governance may not sound like the most exciting topic to do a survey on but for a country whose fund industry is a centrepiece of both Europe and the economy, it cannot be underestimated.

To this end, the ILA together with PwC Luxembourg have taken it upon each other to gather insights from as many boards of investment funds and management companies as possible, covering both liquid and alternative products.

The most pertinent findings of the year included the increased attention boards are paying to AML- and ESG- related developments and legislation. Indeed, most boards believe that regulatory developments, coupled with ESG investment performance will require the most attention in the next two years.

The report has added two entire sections for these categories which examine a wide range of AML-related matters, such as the extent to which boards have approved and validated AML policies and the kinds of ESG-related policies, communications, opportunities, and risks taken by different boards.

On a positive note, the findings also suggest that Luxembourg’s fund industry – and the financial centre as a whole – “has remained resilient” in the face of the turbulence experienced in the past two years. 

The survey ends with a section on current challenges & opportunities and discusses the strategic and operational implications of the latest and upcoming regulations.

“To [ensure that the grand duchy’s fund industry remains a centre of excellence], we believe that it is of paramount importance that boards build on commonly accepted good governance practices while staying abreast of changing local, regional and global trends and regulations,” said Michael Delano, ILA Fund Committee Chairman and PwC Luxembourg Partner and Andrea Montresori, Incoming ILA Fund Committee Chairman and PwC Luxembourg Partner.

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